Netanyahu speech a step forward but not enough: EU

(LUXEMBOURG) - EU foreign ministers on Monday welcomed Israeli Prime Minister Benjamin Netanyahu's conditional backing for a Palestinian state as a forward step, but not enough to upgrade ties.

"In my view it is a step in the right direction," said Czech Foreign Minister Jan Kohout, on his arrival to chair a meeting with his EU counterparts.

That phrase was on the lips of all the European ministers, in Luxembourg for wide-ranging talks.

"Of course, there are a number of other elements which need to be analysed, but the acceptance of the Palestinian state is there," added Kohout, whose country currently holds the EU's rotating presidency.

Netanyahu on Sunday endorsed for the first time the creation of a Palestinian state, provided it was demilitarised, after weeks of pressure from Washington.

But he also said the Palestinians must recognise the Jewish character of Israel, a condition Palestinian president Mahmud Abbas has long rejected.

He also ruled out a halt to all Jewish settlement activity as demanded by the United States, European Union, United Nations and Russia.

That last point is key for both the EU and the US, which called the speech "an important step forward."

"We have insisted on the freezing of settlements. We hope very much this will be a reality," said EU foreign policy chief Javier Solana.

He also stressed the need for the Gaza crossings to be reopened to allow humanitarian aid to flow freely into the ravaged territory.

The European ministers agreed that now was not the time to fulfil their December promise to upgrade ties with Israel.

"We shouldn't talk about an upgrade with Israel if we don't manage to unblock the (peace talks) process in a very positive way," said Luxembourg Foreign Minister Jean Asselborn.

His Finnish counterpart Alexander Stubb gave a flat "no" when asked whether it was now time to boost ties.

Israel's outspoken Foreign Minister Avigdor Lieberman also met with the European ministers Monday, but left without the sought-after upgrade of relations with the European bloc.

He said Israel was ready to begin talks without preconditions with Syria and the Palestinians.

"We are open to sit with the Palestinians immediately, we are ready to sit with the Syrians immediately, and with other countries the same without any preconditions," the ultra-nationalist foreign minister said.

"Regardless of our position we are open to any negotiations."

However French Foreign Minister Bernard Kouchner said the conditions for setting up a functioning Palestinian state were not laid out in Netanyahu's speech.

"Without a Palestinian state there is no chance for peace in the region," he said.

Swedish Foreign Minister Carl Bildt echoed Kohout's cautious welcome of the Israeli leader's keynote speech.

"The fact that he uttered the word state is a small step forward," he told reporters in Luxembourg.

"Whether what he mentioned can be defined as a (Palestinian) state is a subject of some debate," he added.

Any upgrade of EU ties with Israel must be linked to improvements in Palestinian rights, Israeli human rights groups said in a letter to EU ministers.

B'Tselem, HaMoked and Physicians for Human Rights urged the EU "to explicitly link the upgrade process to Israeli demonstration of tangible improvements in human rights and international humanitarian law in the occupied territories."

Tensions have simmered between the EU and Israel since EU External Relations Commissioner Benita Ferrero-Waldner warned in April that an upgrade of ties would not come until the Israeli government commits to peace talks with the Palestinians.

General Affairs and External Relations Council (GAERC)