Benita Ferrero-Waldner, the European external relations commissioner, said the Israeli government must commit itself to negotiations, the EU Observer reported. She said it must also take steps toward a two-state solution, especially stopping any expansion of settlement on the West Bank.
"The ball is now in the court of Israel," Ferrero-Waldner said.
Polls show the European Union is popular in Israel, with 75 percent of Israeli Jews saying they would like the country to join, but the government looks to the United States for support and security.
The union began discussions on upgrading its relationship with Israel, which would have included trade benefits. But any consideration of an upgrade ended late in the month when Israel invaded Gaza.