The so-called Middle East Quartet is "losing its grip" and is making inadequate progress toward improving the lives of Palestinians or improving the prospects for Mideast peace, a group of prominent aid agencies said Thursday.

The report by 21 agencies comes on the eve of a meeting of Quartet members — the United Nations, the European Union, Russia and the United States — scheduled for Friday at the UN General Assembly in New York.

The meeting is to discuss plans to bolster the Annapolis process to achieve peace between Israel and the Palestinians, which was set in motion last November during U.S.-sponsored talks in Annapolis, Md.

Since that meeting, the lives of Palestinians have not improved and may have worsened, the report said.

"The Annapolis process was meant to herald a new dawn for the Middle East peace process," said Christian Aid director Daleep Mukarji.

"Nearly one year on, we are seeing exponential settlement growth, additional checkpoints and, because of this, further economic stagnation," he said. "The Quartet is losing its grip on the Middle East peace process."

The report said the Quartet has failed to hold Israel to account for restricting Palestinians' movement or expanding settlements in the West Bank — which the four powers oppose.

The Annapolis meeting had set the goal of a peace deal by the end of 2008, though that target is looking increasingly difficult to meet, it said.

'Vacuum in leadership,' CARE official says

Moreover the "lack of progress on key goals" set by the Quartet called the group's entire approach into question, the report said.

"Time is fast running out. The Quartet needs to radically revise its existing approach and show the people of the region that it can help make a difference," said David Mepham, Save the Children UK's director of policy,

"We are facing a vacuum in leadership," said Martha Myers, country director for CARE International West Bank and Gaza.

"The Quartet has been unable to hold parties to their obligations and this must change fast.

"The Quartet's credibility is on the line and we hope it will use this meeting to show it is able to go beyond rhetoric and make a real difference to the lives of Palestinians and Israelis," Myers said.

The report assessed progress on 10 of the Quartet's objectives, using data gathered by the aid agencies on the ground. It concluded that in five of the 10 areas, including the most critical, there had either been no change or a marked deterioration.