EU and Israel at odds on how to lift Gaza siege

"Close co-operation between Israel and the EU can end the smuggling and terror against Israel, removal of the siege and even the release of Gilad Shalit," the communique added, referring to the Israeli soldier being held by Palestinian militant group Hamas in Gaza.

The Lieberman statement appears to be a potential breakthrough for EU efforts to end the Gaza siege, imposed by Israel after Hamas took power in the strip in 2007.

A contact in the Ashton delegation told this website on Thursday that it is "difficult" to see how the security force idea fits in with the EU's current offer, however. "We have offered a three-pronged approach: help with infrastructure, equipment and training of Palestinian officials on the border, to help revive Gaza's economy and make sure we meet Israeli security concerns," the EU source explained.

The contact said the union wants to reopen the Kerem Shalom crossing point on the Egypt-Gaza-Israel border, even though Hamas would prefer to reopen the Rafah crossing on the Egypt-Gaza border instead.

The Ashton delegation, which includes the European External Action Service's new Middle East chief, French EU official Hugues Mingarelli, is meeting with Palestinian leaders in the West Bank on Thursday.

The trip was almost jeopardised by a pay-related strike in the Israeli foreign ministry, which has seen Russian President Dmitry Medvedev cancel an upcoming trip to Israel due to lack of protocol facilities.

Meanwhile, publication on Wednesday of leaked US diplomatic cables by Norway's Aftenposten newspaper has shed fresh light on Israel's Gaza policy.

A cable dating back to October 2008 noted: "As part of their overall embargo plan against Gaza, Israeli officials have confirmed to [US officials] on multiple occasions that they intend to keep the Gazan economy on the brink of collapse without quite pushing it over the edge."

Another cable from 2007 said: "The objective [is] to damage the Hamas government in Gaza financially without creating a humanitarian crisis, and to buy time for [rival Palestinian movement] Fatah to rebuild support." It added: "The current closure of Gaza border crossings is not sustainable, with several thousand Palestinians currently waiting to enter Gaza through the Rafah crossing."

Israeli analysts say the EU has in the past exaggerated the level of hardship endured by the 1.4 million Palestinians living in Gaza.

"There is no humanitarian crisis in Gaza - people are not dying of hunger. The tunnel economy means that the markets there are full of goods," Avi Melamed, an Israeli counter-terrorism expert, told EUobserver on a visit to the region in November.

Mr Melamed estimated that there are around 1,300 active and inactive underground tunnels in Gaza. Around 200 are specialised in smuggling arms from Egypt. Another 200 or so are used primarily for smuggling gasoline, while many others are used as Hamas military bunkers underneath civilian facilities in Gaza itself in what amounts to "a huge spider's web" below the strip.