European Union foreign policy chief Catherine Ashton urged Israelis and Palestinians “to find a satisfactory way to engage without delay in substantive negotiations on all final status issues.”
She also called for further easing of the Gaza blockade.
Ashton, who visited Wednesday and Thursday and the Palestinian Territories, stressed that "there is no alternative to a negotiated solution."
"Urgent progress is needed towards a two state solution with Israel and Palestine living side by side in peace and security as part of a just and comprehensive peace," she said in a statement.
During her visit, Ashton spoke to Prime Minister Netanyahu and met with Foreign Minister Avigdor Lieberman, Defense Minister Barak and Kadima party leader Tzipi Livni.
In the Palestinian Territories she met with President Mahmud Abbas and Prime Minister Salam Fayyad. She also visited Bethlehem, including the Aida Camp and the Church of the Nativity.
This was her first official trip abroad in 2011. "My trip to the region so early in the year is an expression of my personal commitment and that of the European Union and its 27 Member States to peace in the Middle East," she explained.
"We will do whatever is possible to help both parties choose the path of peace and engage in successful negotiations. I have reaffirmed the EU's willingness and commitment to contribute to a negotiated solution and post conflict arrangements. We will also continue to support the successful Palestinian state-building efforts."
She proposed that the Quartet meet "as soon as possible" to help find a solution to the current impasse. The Munich Security Conference in early February "offers a good opportunity," Ashton said at the end of her two-day visit.
She also called on Israel to open the Gaza crossings in order to allow the flow of humanitarian aid, imports, exports and people.
"We need to enable children to go to school and ordinary people to reconstruct their homes and get on with their lives."
She said recent Israeli decisions are “steps in the right direction”. "But I have encouraged further efforts and complementary measures to achieve a fundamental change of policy that allows for the reconstruction and economic recovery of Gaza while addressing Israel's legitimate security concerns.“
Israeli Foreign Minister Avigdor Lieberman said that if Europe wanted Israel to lift its siege of the Gaza Strip, it had to help halt the flow of weapons into the territory.
"If you want to bring about an end to the siege of the Gaza Strip, you have to take responsibility and set up a strong, genuine and effective force to stop weapons smuggling," he said in a communiqué issued after his meeting with Catherine Ashton.