RAWABI, West Bank (AP) — After years of setbacks, Palestinians are proudly starting to move into their first planned city being built in the West Bank — a move that isn’t just about real estate but also a symbol of their quest for statehood after nearly 50 years of Israeli military occupation.

Though Rawabi is still unfinished, its glistening high-rises and shopping centers bring a rare sense of pride and excitement to the territory at a time of growing malaise over a standstill in Mideast peace efforts.

Palestinian-American developer Bashar Masri dreamed up Rawabi, which means “hills” in Arabic, back in 2007. But the construction of the city, located about 40 kilometers (25 miles) north of Jerusalem, has repeatedly stalled due to political obstacles. Work only began in 2012.

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Perched on a once desolate hilltop, it’s the first Palestinian city being built according to a modern urban design plan. The organized layout and modern facilities are in jarring contrast to chaotic Palestinian towns and villages in the area.

Since January, the first residents have been slowly moving in.

Mahmoud Khatib came here with his wife and three children from a nearby village because they wanted to live in a modern city. First, “it was an idea,” the 41-year-old banker told The Associated Press. Then “it became a reality.”

His wife Sanaa, 40, is thrilled about her new home.

“Here everything is organized. There is a safe playing area for the kids where you don’t feel worried when they go out. The services are central and available around the clock,” she said. “That’s the place I dreamed to live in.”

Palestinians see the West Bank, which Israel captured from Jordan in the 1967 Mideast war, as part of their independent state, along with east Jerusalem and the Gaza Strip. Under interim accords reached two decades ago, the Palestinian government now rules about a third of the territory. The rest remains under Israeli control, and is home to some 370,000 Jewish settlers. The last round of peace talks broke down two years ago, and prospects for resuming negotiations — much less reaching an agreement — are dim.

Masri said one of the major hurdles in starting Rawabi was getting approval from Israel for an access road and water supply to the city, which took years.

“Dealing with occupation is not dealing with a proper nation,” he said. “It’s dealing with an ugly system.”

Rawabi now has a yearly renewable permit to use a narrow road that passes through an adjacent 1-kilometer (0.6-mile) stretch under Israeli control. A pipeline, which passes through the same area, brings in 300 cubic meters of water a day — insufficient for the residents as well as the construction that’s underway.

Additional water is currently being brought in on tankers, and some people supplement their supply from a nearby village. Masri said his next battle is to triple both the width of the seven-meter (seven-yard) road and the water supply.

He said Israelis from a nearby settlement have gone to court to curb Rawabi’s expansion.

“I’m a strong believer that a Palestinian state is in the making and part of the pillars of building a proper state is to have a strong economy and higher standard of living,” Masri said.

Israel’s defense body, COGAT, blamed the delays on the “unwillingness” by the Palestinian officials to convene a necessary Joint Water Committee but said that despite this, water connection to the city was approved and work is underway to increase supplies. In addition, COGAT said it’s working with the Palestinian developer to find solutions to the access road.

Currently 250 families live in the city. That population is expected to swell to 60,000 when construction ends in about five years.

For Masri, Rawabi has become part of history — “the first Palestinian city to be established in thousands of years” — and he is sure more cities like this will follow. The Palestinian government has envisaged a new city near Jericho, though it’s still in the planning stages.

Rawabi building costs have reached $1.2 billion so far. Funding has come from a Palestinian company run by Masri as well as the Qatari holding company Diar. A three-bedroom apartment averages about $100,000, about 25 percent less than in the main Palestinian West Bank city of Ramallah nearby.

Along with a large amphitheater that can hold 12,000 people, Rawabi now boasts also an industrial zone, schools, and the first big Western-style open-air shopping center in the West Bank. Such attractions lumped together in one city are unheard of in Palestinian areas.

There is a mosque under construction and also a church, which will serve the Palestinian Christian minority. About 10 percent of Rawabi residents are expected to be Christian.

Masri can see it all so vividly.

“I would love to sit at a café in Rawabi and watch the people going around, enjoying themselves, living in a nice clean environment and being happy,” he muses.

“We deserve some relaxation and happiness … we have been dealt a terrible deal, dozens and dozens of years. We deserve better.”