The European Union pressed Israeli's new government Wednesday to take steps to revive the Mideast peace process, facing a crucial juncture after Israeli and Palestinian polls.

The 25-nation bloc, a member of the so-called Mideast Quartet seeking to ressurrect hopes of peace, is already facing tough questions over how to continue financially supporting the Palestinians after the militant group Hamas won a January election.

EU foreign policy chief Javier Solana said he had spoken with acting Israeli prime minister Ehud Olmert, whose centrist Kadima party will begin coalition talks next week after the Tuesday polls.

"I encouraged Mr. Olmert to pursue all efforts to move towards a peaceful, negotiated resolution of the Middle East conflict," he said in a statement.

The win by Kadima, led by Olmert after the political demise of prime minister Ariel Sharon due to a stroke, has dramatically redrawn the Jewish state's political landscape.

Olmert's Kadima party won 28 seats, not enough to be able to govern alone, leaving him with little option but to invite other parties into a coalition including the centre-left Labour, which won 20 seats.

EU External Relations Commissioner Benita Ferrero-Waldner underlined that the Israeli polls "are important for Israel, for the Middle East and for Europe."

"Taken together with the recent Palestinian elections, the vote in Israel will have a shaping influence on the prospects for moving towards a peaceful resolution to the Israeli Palestinian conflict," she added.

"The EU, as a member of the Quartet, stands ready to work with the new Israeli government to promote security and peace for Israelis and Palestinians alike," said Ferrero-Waldner, referring to the mediation by the EU, the United States, Russia and the UN in the conflict.

Solana added that, in his talks with Olmert, "I assured him tht the European Union stands ready, as always to offer all support to this process."

The EU's role as biggest provider of Palestinian aid has been thrown into question by Hamas' poll win. The EU has warned it could cut funding if Hamas refuses to renounce violence, recognize Israel and respect existing accords.

The peace process was also thrown into turmoil by Sharon's incapacitation. "We remain profoundly saddened by the illness of Prime Minister Sharon. Our thoughts and prayers go to him and his family," said Ferrero-Waldner.