PORT-AU-PRINCE (Reuters) - "Retou ala Vi. Ayiti Pap Peri" (Back to life, Haiti will not die) reads the banner in Creole stretched up beside a crowded camp of earthquake survivors in the heart of the wrecked capital Port-au-Prince.

Life, in the form of bustling pedestrians, chaotic traffic and teeming street markets, has indeed bounced back in the city after the devastating Jan. 12 quake that killed maybe more than 300,000 and ...

... turned streets into jumbles of rubble.

But a massive task of reconstructing the quake-shattered capital and its dependent nation -- a small Caribbean state that was already a byword for poverty in the Western Hemisphere -- now faces Haiti's government and donors when they meet in New York on Wednesday to pledge funds and agree to strategies.

President Rene Preval and the country's foreign partners have stressed that the rebuilding should seek not just to put back what was lost -- the destroyed buildings, schools and hospitals -- but lift Haiti out of the cycle of instability and underdevelopment that has kept it mired in misery for decades.

"Haiti is on its knees, we must get it to stand back up," Preval said in a recent speech to private entrepreneurs.

Estimates of damage inflicted by the magnitude 7.0 quake, viewed by some as the most deadly natural disaster in recent history, range between $8 billion and $14 billion.

Participants in Wednesday's conference will look to secure not only a major envelope of funds -- an initial figure contemplates $3.8 billion over 18 months, much more for the longer term -- but also a viable blueprint for Haiti's successful future development.

This will try to tackle some of the restraints that have locked Haiti in a poverty trap for years.

Proposals include an urgent decentralization strategy to create jobs and wealth outside the capital of some 4 million people -- more than a third of the country's population -- which has so monopolized national economic life that Haitians jokingly refer to it as the "Republic of Port-au-Prince."

There are also calls to rally private investment to the reconstruction effort, for example in textile manufacturing, tourism, and agriculture, where cheap subsidized imports of rice and sugar have kept Haitian peasant farmers relegated to dirt-poor subsistence farming.

Supporters of Haiti, who include former U.S. President Bill Clinton, who spent his honeymoon there and is now the special United Nations coordinator for the relief effort, say the disaster provides an opportunity to "build back better."

"This country has the best chance to escape its past that it's ever had," Clinton said last week in a visit to Haiti. "As horrible as this is, it gives them a chance to start again."

STILL AN EMERGENCY OPERATION

But this hopeful vision must be set against the deep pessimism that seems to affect many ordinary Haitians, accustomed as they are to seeing the country's resources, and foreign largesse, being monopolized by a small elite. The specter of corruption looms large in the national conscience.

"There might be some more money (from the donors), but those who need it won't receive it," said mother of three Gilene Morquette, as she jostled in a crush of women waiting to receive a Save the Children aid handout at a sprawling quake survivors' camp in the city's Petionville golf club.

Skepticism also gripped 47-year-old barber Raymond Martin as he showed reporters his destroyed barber shop in the ruined downtown city center. He lost a child in the quake.

"For Haiti to have a chance, the foreigners must be the ones who reconstruct," he said. "I don't want Haitians to govern, we should have a foreign protectorate here," he said, touching off a debate on the still rubble-strewn street side.

There will be no foreign protectorate -- donors and aid partners are careful to insist that Haiti's government directs the reconstruction -- but monitoring mechanisms are being included in plans to finance the rebuilding effort.

The World Bank is due to act as "fiscal agent" of a Multi-Donors Trust Fund to be created for Haiti.

But while the government and donors plan reconstruction, aid workers are urging them not to ignore the immediate needs of the more than 1 million homeless quake survivors who are still camped out precariously in streets and open spaces, vulnerable to the approaching rains and hurricane season.

"For us, this remains an emergency operation," said Iain Logan, head of Haiti operations of the International Federation of Red Cross and Red Crescent Societies.

He saw Haiti's rebuilding as a bigger challenge even than the reconstruction after the 2004 Indian Ocean tsunami. "In my professional lifetime, we've never had to rebuild a capital city, on which the whole country was fundamentally based."

The European Union and a coalition of U.S.-based humanitarian groups have indicated they are likely to pledge more than $2.7 billion for Haiti at the New York conference.

U.S. President Barack Obama has asked Congress for $2.8 billion in funds for Haiti relief and reconstruction costs.

But there is recognition this will be a long job. "No one walks away from the scenes of devastation I've seen ... within 18 months. This is for the long haul," said British International Development Minister Mike Foster, after a visit last week.

(Editing by Eric Beech)

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