Netanyahu’s idea for the creation of a limited Palestinian state drew criticism from Palestinians as well as Arab states.

Conditions set by Israeli Prime Minister Benjamin Netanyahu for the creation of a Palestinian state keeps European Union at bay from upgrading ties with Tel Aviv.

Following Netanyahu’s foreign policy speech on Sunday, European Union officials said Monday that they would delay any improvement in relations with Tel Aviv since the Israeli government has ignored repeated EU demands for a freeze in settlement activities in the occupied West Bank and lifting the deadly Gaza blockade.

On Sunday, the far-right Israeli prime minister offered his support for a Palestinian statehood for the first time but only if it is demilitarized and if Palestinians accept Israel as a Jewish state. Palestinians have rejected the conditions.

However, the EU — supporting a two-state solution which calls for a Palestinian state living side by side with Israel in peace — said that Netanyahu’s comments were "a step in the right direction", but not enough to increase relations with Israel to a higher level.

EU has urged Tel Aviv to take more steps toward peace with Palestinians.

Upgrading Israeli-EU political, economic and trade relations has been under discussion since December, but it was shelved following Israeli’s three-week war on Gaza which left over 1,400 Palestinians dead.

European foreign ministers will meet with Israeli Foreign Minister Avigdor Lieberman in Luxembourg this week.

Palestinians have repeatedly said that they would resume the long stalled peace talks with Israel only after Tel Aviv shows commitment to the two-state solution and halts expanding settlements in the occupied Palestinian lands.

(Press TV)