Resolving the conflict between Israel and Palestine is a strategic priority for Europe because without peace there’s little chance of dealing with other problems in the area.

The EU’s official objective is a two-state solution, with an independent, democratic, viable Palestinian state living side-by-side with Israel and its other neighbours.

To help reach this objective, the EU wants Israel to agree to a negotiated withdrawal from the West Bank and Gaza Strip territories it occupied after the Arab-Israeli Six Day War in 1967.

A peaceful withdrawal is in accordance with UN Security Council resolutions and the principles of the 1991 Madrid Process at which peace negotiations were launched between Israel and some of its Arab neighbours.

The EU also works towards finding solutions to the Israeli-Syrian and Israeli-Lebanese disputes.

Europe’s policy on the Middle East is based on an inclusive approach that is not biased in favour of either Israel or the Arab states. The first important step in developing this policy began in 1980 with the Venice Declaration, which called for the involvement of the Palestine Liberation Organisation (PLO) in peace negotiations.

The declaration was the first time a major power had recognised the right of Palestinians to self-determination and while it was dismissed by Israel and ignored by the USA its core principals were later adopted in the Oslo Accords signed in Washington by the Israelis and the PLO in 1993.

The European Union reaffirmed its support for a negotiated settlement in the Middle East in the Berlin Declaration of 1999 as it did with the Seville Declaration of 2002, the same year that the EU co-sponsored the Roadmap for Peace, a three-stage process for achieving these objectives.

The Roadmap was presented to Palestinian and Israeli leaders by Quartet mediators – a grouping made up of the United Nations, the European Union, the United States and Russia.

The Roadmap called for an end to violence and settlement activities but despite some progress over the past decade later it has so far failed to provide a solution to the crisis.

Current obstacles include the Israeli blockade of the Gaza Strip, which EU foreign ministers have described as “unacceptable and politically counterproductive”. In June 2010 the Foreign Affairs Council demanded the unconditional opening of crossings to allow humanitarian aid, commercial goods and people to move freely.

However, despite the difficulties the EU continues to lend its support to efforts to end conflict in the region and has taken up a number of key positions on the peace process.

In December 2010 a meeting of the Foreign Affairs Council called for urgent progress towards a two state solution adding that the legitimacy of the State of Israel and the right of Palestinians to achieve statehood must never be called into question.

When it comes to supporting peace in the Middle East the European Union puts its money where its mouth is. The EU is the single largest financial contributor to the Palestinian Authority, sending over €3.3 billion in aid to the Palestinians between 2000-09.

Some of the funds are needed to pay salaries and run education, health and other services in the West Bank but much of the money from the European Commission and individual Member States goes to the UN Relief and Works Agency (UNRWA).

UNRWA aid is essential to ensure that Palestinian refugees don’t starve, have shelter and get an education and the agency services between 1.6 and two million refugees living in Lebanon, Syria and Jordan; and at least another half a million in the West Bank.

UNRWA has also been providing essential humanitarian aid to one million Palestinians living in the Gaza Strip since the imposition of the Israeli blockade there in 2007.

The EU also jointly funds projects on the ground with UNRWA including a €40 million partnership at the Palestinian village of Al-Walaja that funds human development work, such as education, health and social protection.

Other EU co-funded projects include the GA-S-INK (Gaza School Inclusion) project that supports teachers from six schools in the northern part of Gaza Strip to work with children with special needs.

The European Union's presence on the ground is also crucial in contributing to crisis management and prevention. There’s currently two European Security and Defence (ESDP) operations in the Palestinian Territories, - the EU Border Assistance Mission at the Rafah Crossing Point (EU BAM Rafah), where border crossings are monitored and the EU Police Mission in the Palestinian Territories (EUPOL COPPS), which helps with police reform.

The EU is also supporting the Palestinian’s state-building plan and has earmarked €300 million in 2011 to fund institution-building work.

While much of the funding focus is naturally targeted at Palestinian projects the EU also works with Israel to support peace through programmes designed to promote tolerance and non violence.

The EU Partnership for Peace Programme supports Israeli civil society initiatives that promote peace and there’s a number of local and regional cultural activities that focus on building cultural bridges between the European Union and Israel.

These programmes are carried out under the European Neighbourhood & Partnership Instrument (ENPI) while other EU initiatives open to Israeli bodies include the European Instrument for Democracy and Human Rights (EIDHR) which aims to provide support for the promotion of democracy and human rights in non-EU countries and higher Education programmes such as Tempus, Erasmus Mundus and Jean Monnet.