EU offers 'unprecedented' aid to help Israeli-Palestinian talks

BRUSSELS (Reuters) - The European Union promised Israel and the Palestinians better access to European markets and "unprecedented" political and economic aid as an incentive to push them into resolving their decades-old conflict. Shrugging off gloomy predictions of failure, U.S. Secretary of State John Kerry said last week the Israelis and the Palestinians remained committed to peace talks and were on course to wrap up a deal by the end of April. To support a deal, the EU would offer closer cultural and scientific links and trade and investment support, EU foreign ministers said in a statement on Monday. "The EU will provide an unprecedented package of European political, economic and security support to both parties in the context of a final status agreement," they said. "Current talks represent a unique opportunity which must be seized by both parties." The EU is already the biggest aid donor to the Palestinian authority and Israel's biggest economic partner, accounting for almost a third of its exports and imports. The ministers, meeting in Brussels, gave no further details on how much the new EU aid could be worth or what specific areas of cooperation would be included. The EU's foreign policy chief Catherine Ashton said only that the 28-nation bloc wanted to throw its economic muscle behind an agreement. "It is a good word, 'unprecedented' ... It is meant to send the strongest signal possible that we really want this agreement to happen," she told reporters. "We know it is difficult." Diplomats said the EU could, among other things, help the two sides participate in international institutions, something that is often hampered by deep-seated divisions in the world over the conflict. Monday's proposal could help smooth relations between Israel and the European Union, strained in recent months over the bloc's plans to restrict aid and research funding to Israeli institutions operating in the West Bank. Ties between Europe and Israel have grown increasingly fractious over the last few years, with Brussels seldom missing an opportunity to criticize the government for building settlements on occupied Palestinian land. In a series of statements since June 2009, EU foreign ministers have steadily sharpened their tone, leading to the publication in July this year of strict new rules on how EU funds can be distributed to Israeli organizations. Kerry wants the two camps to accept a so-called framework accord that will touch on all the main issues, such as security, the future of Jerusalem and the fate of refugees, and serve as a broad outline for the final deal. Palestinians fear such a preliminary agreement could delay once again their hopes of establishing an independent state in the West Bank, Gaza Strip and East Jerusalem - land the Israelis seized in the 1967 war. (Reporting by Justyna Pawlak; Editing by Andrew Heavens)