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Progress on upgrading EU-Israel relations will remain frozen until Israel takes steps to repair the peace process with Palestinians, the European Commission indicated on Thursday (23 April).

" We do not believe the time is right to go beyond the current level of relations " external relations commissioner Benita Ferrero-Waldner said in Brussels during an annual stock-taking of ties with its neighbours.

Gaza after Operation Cast Lead : The strip remains closed to reconstruction

" We expect a clear commitment from the new [Israeli] government to pursue negotiations with the Palestinians. We expect a stop of all activities undermining our objective of a two-state solution and this includes in particular settlement expansion, which is continuing on daily basis. "

" The ball is now in the court of Israel. "

The EU in December 2008 started talks on the upgrade, which was to include regular bilateral summits and trade perks for Israel. But Israel's launch of Operation Cast Lead in Gaza later the same month, costing the lives of 415 Palestinian children, halted the process.

The Portuguese and Belgian foreign ministers at an EU meeting in March indicated they would veto any re-start of the upgrade until concerns were met. Swedish diplomats delivered the same message in Israel earlier this month.

The International Crisis Group, a conflict-monitoring NGO, in a new report out Thursday warned that fighting in Gaza could easily re-ignite this year, calling Israel's closure of the strip to reconstruction work " dangerous ".

Ordinary Israeli Jews feel strongly positive about the EU, despite the diplomatic friction.

Seventy-five percent said they would like Israel to join the 27-country bloc in a fresh poll conducted by the Konrad Adenauer Stiftung. Forty percent of Israeli Arabs would also like the country to join.

Accession is unlikely to happen due to Article 49 of the EU treaty, which states that any "European state" meeting certain criteria is eligible to apply.

The EU in 1987 rejected Morocco's application on geographic grounds. When asked about Israel's eligibility by EUobserver, the commission said in a statement : "  The term 'European' combines geographical, historical and cultural elements which all contribute to European identity ...[which] is subject to review by each succeeding generation ".

Meanwhile, Israeli diplomats are taking a hard-headed approach to European relations. A senior diplomatic source on Thursday told Israel's Ha'aretz newspaper that national security is guaranteed " first of all [by] us, then the United States, and the third leg is Europe ".

2008 bad for democracy

The European Commission's spring audit of development in the other 15 countries covered by the "neighbourhood policy" broadly found that 2008 was a good year for the economy, but a poor one for democracy.

" On balance however, we have to note, unfortunately, that the pace of reforms indeed has slowed particularly on democratic reforms, governance and human rights standards " Ms Benita Ferrero-Waldner said.

In the south, Jordan, Morocco, Tunisia and Egypt emerged as the most progressive states. Ukraine, Georgia and - ironically, given the April 2009 crisis - Moldova last year led the class in the east.

The stock-taking also showed up the deep differences in the group of countries placed into the neighbourhood policy basket back in 2004, with Ukraine and the EU working on nuclear decommissioning while Egypt struggles to curb female genital mutilation.

" The European Neighbourhood Policy remains as relevant as ever " Ms Ferrero-Waldner said.

Source : EUobserver (http://euobserver.com/9/27994)