Palestinian Prime Minister Salam Fayyad and EU foreign policy chief Catherine Ashton in Brussels signed an agreement on Monday (19 March) to build a waste water treatment plant in the West Bank and improve a key border crossing. The €35 million deal, clinched during a two-day conference on Palestine refugee youth organized by the United Nations Relief and Works Agency (UNRWA), is part of a larger EU annual assistance package worth €450 million a year for the Palestinians. The EU earlier this year already signed off on €150 million of new projects for 2012. \"Through this investment, the EU will significantly contribute to the improvement of the living conditions of the Palestinian population through two separate projects in the West Bank and the Gaza Strip,\" Ashton said at the conference. Specifically, the agreement calls for a €22 million medium-scale waste-water treatment plant to be built in the Tubas Tayasir areas in the north of the West Bank. The facility, the second of its kind in the region, will also treat water for agriculture. The plant should be a welcome addition for a territory with limited ground-water resources. According to the Palestinian Water Authority, the water sector in the West Bank and Gaza Strip has not been allowed to properly develop over the past 30 years. Around 37 percent of the population in rural areas has no access to water services and urban-area water infrastructure is crumbling. An internal EU report from last December accused Israeli settlers of monopolising farm land and water in the Jordan Valley in a bid to drive out native Arabs. Water supply and sanitation in the Gaza Strip are also in a deplorable condition, worsened by the 2009 Israeli military offensive, according to a report by the United Nations Environment Program. The remaining €13 million of the agreement will be used to upgrade the Kerem Shalom border crossing between Israel and southern Gaza. The border crossing is currently only used to transfer goods. The upgraded border should allow for a greater flow of trade, Ashton said. Loading and inspection areas as well as new warehouses will be built. New x-ray machines, a weigh-bridge, and inspection areas will also be installed. The EU funding is meant to help improve the dire living conditions of many Palestinians both in Gaza and the West Bank and to support state-building measures. In Gaza, children make up nearly half the 1.5 million population. Many suffer from a lack of proper access to clean drinking water. The UNRWA estimates that by 2020 there could be at least 1.5 million young Palestinian refugees aged between 15 and 29. Nearly a quarter will be unemployed, according the UN agency. The EU effort comes at a highly sensitive time after a man on a motorcycle in Toulouse, France on Monday shot dead a teacher and three children at a Jewish school. The event has caused shock in Europe and in Israel, while prompting a huge manhunt in France. For its part, the right-wing Israeli newspaper the Jerusalem Post, on Tuesday accused Ashton of bad taste in equating the killings with Israel\'s killing of Palestinian children on numerous occasions in the occupied territories after she said: \"\"When we think about what happened today in Toulouse, we remember what happened in Norway last year, we know what is happening in Syria, and we see what is happening in Gaza and other places - we remember young people and children who lose their lives.\" Israeli officials last week also deemed \"unacceptable\" a leaked EU report on Jewish settler attacks against Palestinians because it did not devote equal space to Palestinian attacks on Jews.