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Seville, Spain, Sunday (AFP)

European Union leaders, alarmed by the rapid escalation of Middle East violence, called for a quick return to talks and the establishment of a Palestinian state based on 1967 borders.

"The crisis...has reached a dramatic turning point," said the final communique of a two-day EU summit here. "Further escalation will render the situation uncontrollable. The parties on their own cannot find a solution," it said. "A settlement can be reached through negotiation, and only through negotiation."

"The objective is an end to the (Israeli) occupation (of Palestinian territories) and the early establishment of a democratic, viable, peaceful and sovereign Palestinian state, on the basis of the 1967 borderes, if necessary with minor adjustments agreed by the parties."

"The end result," said the statement, "should be two states living side by sis within secure and recognized borders, enjoying normal relations with their neighbors." It said a reform of Yasser Arafat's Palestinian Authority (PA), which Israel blames for the now regular suicide bombings, "is essential."

"The European Council expects the PA to make good its committment to security reform, early elections and political and administrative reform," it said.

But, referring to Israel, it added: "Military operations in the occupied territories should cease. Restrictions on freedom of movement should be lifted. Walls will not bring peace."

The declaration also reiterated the EU's support for an international conference involving two parties, plus the US, UN, EU and Russia - the so-called Quartet - and other Arab and involved states.

Meanwhile Israel threatened on Saturday to launch a "crushing offensive" and impose an indefinite reoccupation of Palestinian areas unless suicide bombing and shooting attacks against Israelis stopped.

"We have to take much more massive action than we have until now. If this means entering the territories and staying there for a long time then we will have to consider it," Amos Yaron, director general of the Defence Ministry, told Israel Radio, describing the potential action as a "crushing offensive".

Meanwhile Suicide bomb attacks are not only wreaking havoc on the lives of ordinary Israelis, they are also stirring divisions among Palestinians themselves on the best ways to fight against the Israeli occupation. These differences have emerged as the number of Palestinians who have signed a petition calling for a halt to suicide attacks against Israeli civilians rose to nearly 1,000 on Saturday, organisers said.

The row is reflective of the symptoms of weakness that has plagued the Palestinian leadership since the start of the uprising, or intifada, in September 2000, analyst and opponents of the petition have said. This week's reoccupation of Palestinian self-rule towns on the West Bank, after a major offensive lasting more than five weeks earlier this year, have fuelled the row, they added.

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