Europe looked set yesterday to reaffirm its readiness to recognise a Palestinian state at an “appropriate” time, opting to avoid tough action against Israel to break the Middle East impasse.

Pressure has built on the European Union to flex muscle after Israel refused to extend a moratorium on settlements, with 26 former European leaders last week demanding sanctions, and Argentina and Uruguay joining Brazil in recognising an independent Palestinian state.

Palestinian president Mahmud Abbas has urged the bloc’s foreign policy chief Catherine Ashton in a phone conversation “to take a step towards recognition of the state of Palestine based on the 1967 borders,” chief Palestinian negotiator Saeb Erakat said.

And in Israeli media, even its closest EU ally Germany was reported yesterday to be urging the recognition of a Palestinian state – a report later described as “simply false” by Berlin.

“There is growing frustration with Israel after its refusal to commit to a new settlements freeze,” a European diplomat said as negotiators quibbled and clashed over a joint EU stand.

But after long and prickly negotiations begun last week, foreign ministers meeting in Brussels were set to adopt a draft statement seen by AFP that falls short of ultimatums and breaks little new ground. Going into the talks, Cyprus Foreign Minister Markos Kyprianou said the recognition of a Palestinian state was not excluded.

“That’s always been on the table,” he said. “But at this stage it’s too early to give up on the possibility to resume Israeli-Palestinian negotiations.”

As US Middle East envoy George Mitchell arrived in the region Monday following the breakdown in direct talks, the EU drafted a statement that expresses “regret” at Israel’s rejection of a new freeze, describing settlements as “illegal” and “an obstacle to peace.”

The draft underlines that the EU actively supports “a negotiated solution” between Israel and the Palestinians “within the 12 months set by the Quartet” of international mediators.

It also “welcomes” a recent World Bank assessment that the Palestinian Authority “will be ready for statehood in the near future” and goes on to say that the EU “reiterates its readiness, when appropriate, to recognise a Palestinian state.”

The EU will not recognise changes to pre-1967 borders, including with regard to Jerusalem, other than agreed by the parties.

“This could include territorial swaps,” it says, without further comment.

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