Israel is expected to hand down to the UN a report showing that Palestinian economy is still dependent on foreign aid, rendering the Palestinian National Authority (PNA) incapable yet of declaring an independent state, local media reported on Sunday.

The document, titled "Measures Taken by Israel in Support of Developing the Palestinian Economy and Socio-Economic Structure," consisting of 44 pages, will be delivered this Wednesday to UN representatives at a donor meeting in Brussels, as well as to the European Union foreign policy chief Catherine Ashton and Mideast Quartet envoy Tony Blair.

The report was written to contradict similar documents such as the World Bank's report for 2011, prepared after PNA's statehood bid at the UN.

The World Bank's data concluded that Palestinian economy was ready to allow the PNA to declare an independent and stable state, the Ha'aretz daily reported.

However, Israel's report indicated that the PNA is still enormously dependent on foreign aid, and that many of its financial institutions were not fully developed.

"The fiscal crisis is especially acute because much of the West Bank economy still depends on the public sector and on construction projects, both still heavily financed by foreign aid. It also serves as an alarming warning sign for the stability of the Palestinian economy," the report read.

Israel's report also showed that despite recent tensions with the PNA, security cooperation increased during 2011 with more than 750 meetings between the Israeli military and their Palestinian counterparts.

Data from the Israeli Ministry of Foreign Affairs showed that health cooperation between both parts also increased during 2011, with more than 200 thousand patients from the West Bank receiving medical treatment in Israel, a 15 percent increase from 2010.