
The EU warned on Monday that continued growth of its bilateral ties with  Israel  and the Palestinian Authority was directly linked to their  actions with regard  to the peace process.
“The EU recalls that  the future development of the  relations with both the Israeli and  Palestinian partners will also depend on  their engagement towards a  lasting peace based on a two-state solution,” the  EU’s foreign  ministers said after a council meeting in Brussels.
The  meeting  of the EU’s Foreign Affairs Council comes amid increasing tension   between Israel and the EU over settlement activity.
On Sunday,  Foreign  Minister Avigdor Liberman said that it was a mistake for the EU  to link its ties  with Israel to the peace process.
The EU and  Israel have strong ties, and  Israel is awarded a status similar to that  of an EU member state. But that  status only applies to areas within  the Green Line.
Still, Israel is  worried about the increased  threat of an EU boycott against products  manufactured in settlements  and calls from parliamentarians in EU member states  to unilaterally  recognize a Palestinian state.
In Brussels on Monday,  foreign  ministers vowed to continue working against the sale of goods produced   in Jewish communities over the pre- 1967 lines. This includes West Bank   settlements, Jewish neighborhoods in east Jerusalem and Jewish  communities on  the Golan Heights. The EU believes that all those  communities are illegal.  Recently, dairy and poultry products from over  the Green Line were banned from  the European market.
While the  ministers’ words implied a boycott or a  ban of those products, many of  which already have consumer labels marking them  as produced in  settlements, the council’s conclusions did not state that  outright.
The  EU’s Foreign Affairs Council said that “the EU and its  member states  remain committed to ensure continued, full and effective  implementation  of existing EU legislation and bilateral arrangements applicable  to  settlement products.”
It added that “the EU closely monitors the   situation and its broader implications and remains ready to take  further action  in order to protect the viability of the two-state  solution.”
It issued a  three-page statement on the  Israeli-Palestinian conflict as part of a renewed  effort by the EU to  be involved in any US-led revival of the peace talks, which  have  remained frozen since April.
After the meeting, the EU’s new  foreign  policy chief, Federica Mogherini, said that the EU supports the  initiative US  Secretary of State John Kerry is pushing to relaunch the  peace  process.
As part of that effort, Kerry spoke with PA President Mahmoud  Abbas on Sunday evening.
The  EU was looking at a regional framework that  involved the US, EU and UN  Security Council, and that would also include Jordan,  Egypt and Saudi  Arabia, Mogherini said.
“We decided that we cannot just  wait and  see. We are running out of time. There is an element of desperation in   the area,” Mogherini told reporters.
She said that media reports of  pending EU sanctions against Israel were not true.
In  response to a  question by a reporter about possible EU recognition of a  Palestinian state, she  said that the question was misplaced.
“To  me, the real point is not so  much the recognition of a Palestinian  state, but what can we usefully do to have  a Palestinian state,”  Mogherini said.
EU member nations can recognize  “Palestine” as a  state, but that would not necessarily change anything on the  ground,  she said.
But, “You could have a wave of pressure that could lead  to a positive result,” she added.
So  her focus, she added, was a “road  map for political action” that could  have a positive impact on achieving a  solution that would allow Israel  and a Palestinian state to live side by side in  peace and security.
The  Foreign Affairs Council meeting was the first one  to be chaired by  Mogherini, who entered her post at the beginning of November,  replacing  Catherine Ashton. She immediately made a two-day trip to Israel and   the Palestinian territories, including Gaza.
EU states are  sharply  divided on the topic of unilateral recognition of a Palestinian  state, and the  EU would need unanimous consensus among its member  states to take the step to  recognize “Palestine.”
Lithuania’s  Foreign Minister Linas Linkevicius  told reporters that he believed that  such recognition should only come after a  negotiated agreement for a  two-state solution.
“We have to chose to avoid  any unilateral  steps, because the endgame is clear, a two-state solution, with   everyone behind it,” he said.
The question is how to reach that goal, he  said, adding that he believed the only way to do so was through  negotiations.
The governments of the UK and Germany have the same stand  on this issue as Lithuania.
German  Foreign Minister Frank-Walter  Steinmeier explained this position to  Palestinian Authority President Mahmoud  Abbas when he met with him in  Ramallah on Saturday.
But in October,  Sweden voted to recognize a Palestinian state.
Poland  and Hungary did so  before they became EU member states. France and  Denmark have also scheduled  nonbinding votes on the issue.
Israel  has said that such recognition is  harmful to the peace process because  it doesn’t give the Palestinians any  incentive to return to the  negotiating table.