A World Economic Forum on the Middle East wraps up on Sunday after highlighting the need for education to strengthen competitiveness and amid calls to support an Arab plan for peace with Israel.

United Arab Emirates Prime Minister Sheikh Mohammed bin Rashid al-Maktoum announced a 10-billion-dollar education fund to bridge what he called a wide knowledge gap between the region and the developed world in the West and Asia.

"Our only choice is to bridge this gap as quickly as possible, because our age is defined by knowledge," he said.

Sheikh Mohammed, who also rules the booming emirate of Dubai, said the foundation will establish research centres in the region and in 2008 will begin providing scholarships for students to top world universities and institutes.

Jordan's King Abdullah II also urged delegates to think of the future.

"These young men and women deserve to be part of a prospering region that is playing its rightful role on the world stage," he told the forum on Friday.

Of 325 million people living in the Arab world, more than 200 million are under 24, the king said.

Appeals to invest in people were also echoed by other participants, with one panelist pointing out that only 298 patents have been issued in the Middle East and North Africa.

"The United States issues nearly 500 patents per day," said Arif Naqvi, a leading UAE businessman. "The region can only close this tremendous innovation gap through education."

On the political front, an Arab plan for peace with Israel received further backing, with King Abdullah calling it an "historic opportunity to achieve a just, comprehensive and lasting settlement."

"It is in the interest of this entire region -- and indeed, the world -- that we succeed," he said, referring to the Saudi initiative revived at an Arab summit in March.

The plan offers Israel normal relations in exchange for its withdrawal from all land seized in 1967, the creation of a Palestinian state and the return of Palestinian refugees.

Israel rejected the plan when it was first mooted in 2002 but has said recently that the proposal could provide a basis for talks, provided there are amendments to the refugee issue.

Afghan President Hamid Karzai said Muslim nations should support the plan and Pakistani Prime Minister Shaukat Aziz called the Palestinian issue "core to stability in the world."

Iranian Foreign Minister Manouchehr Mottaki was sceptical, however, saying that all previous peace plans had failed "because of the approach of the other side" -- meaning Israel.

"We do not see any chance for the success of the Arab peace initiative because it fails to address fateful issues, like the capital of a Palestinian state and the right of return for some five million refugees," he added.

Jordan's Prime Minister and Defence Minister Marouf Bakhit said that "for the first time the Arabs have taken control of the peace agenda."

Some 1,000 participants from around 50 countries attended the annual forum which will be held in Egypt next year.

Leaders of the G11 developing countries also met on the sidelines and agreed on a framework of cooperation with G8 industrialised nations in a bid to ease debt and build more prosperous economies.