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Israel's indecisiveness toward the European Union is clouding the future of bilateral relations, the EU commissioner for external relations said in Jerusalem yesterday.

"EU-Israel relations cannot yet fulfill their potential because the path ahead is not clear," Benita Ferrero-Waldner said in a speech at the Hebrew University of Jerusalem. "We strongly sense that Israel has not yet made up its mind how to work with us - not surprising given the EU's complexity and its multifaceted identity."

Ferrero-Waldner spent a day in Israel, finishing her visit here yesterday and is continuing today to Ramallah and Jordan. She will meet with Palestinian Authority Chairman Mahmoud Abbas.

Cooperation on energy and transportation

The commissioner said the EU is interested in deepening its economic ties with Israel, developing stronger cooperation on energy and transportation issues and increasing the exchanges between business people, academics, local authorities, artists and young people.

Ferrero-Waldner staked out an ambiguous position on recognizing a Palestinian unity government, saying the EU hoped the future Palestinian government will respond to the principles of peace put forward by President Abbas and by the Quartet. "We will judge this government by its actions," she said.

Later in the day, the commissioner told Foreign Minister Tzipi Livni that the Mecca agreement on the unity government has helped prevent further violence in the territories.

Livni said Israel doesn't want to see wars either, but that continued pressure must be exerted on the extremists to advance the diplomatic process.