European Parliament President Jerzy Buzek said "unilateral actions cannot bring lasting peace in the way that comprehensive negotiation would do," in a reference to Palestinian plans to unilaterally seek recognition of a Palestinian state at the United Nations in September.
Buzek is currently on an official visit to the Palestinian territories and Israel from 12-15 June.
He said that "it is the moment to start negotiations and achieve an agreement."
The European Union, he added, supports Palestinian unity, but a new government must recognize Israel and accept past accords.
"We support the agreement to form a new Palestinian government which renounces violence, accepts Israel's right to exist and respects all previous accords," he told reporters in Gaza.
On Monday, Buzek visited EU–funded and UNWRA (United Nations agency for Palestinian refugees) projects in the Gaza Strip.
"The Gaza blockade must end. Gaza should be opened to the outside world," he said after the visit.
He added: "The blockade has wiped out the formal economy in Gaza, causing very high unemployment, poverty and frustration. Let's end this vicious circle where the lack of opportunity leads to poverty and poverty breeds anger and radicalism."
The blockade was imposed in June 2006 after the capture of Israeli soldier Gilad Shalit by Palestinian groups from Gaza and it was tightened when Hamas took control of the territory a year later.
On Wednesday, Buzek will pay a two-day visit to Israel where he will have meetings at the highest political level as well as meet with students, NGOs and civil society.