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There are moments in political life when your instinct tells you that a fundamental shift has occurred. Sometimes the feeling is no more distinct than a faint breeze, sometimes it is as clear as a sudden break in the clouds. My instinct tells me that such a shift has just taken place in the European Union's relationship with Israel.

The EU and Israel have so much in common - not just our cultural and historical ties, but also our everyday personal contacts. We share the same values of democracy, respect for human rights and the rule of law and basic freedoms. And in the economic sphere, the EU is Israel's biggest trading partner - approximately 40 percent of Israeli imports come from the EU, and about 30 percent of Israeli exports go to the EU.

But for all that, in recent years there has been a chill in the air when we have met.

To my delight however, the warmth is now returning. Changes in the international arena, such as the forthcoming elections in the Palestinian Authority, a new American administration and indeed a new European Commission, give us a real opportunity to look afresh at our relations and examine where we would like to go from here.

And we are fortunate to have the tool with which to do so. On December 13, the European Union and the Government of Israel agreed to an Action Plan, developed as part of the European Neighborhood Policy (ENP), which lays out a number of areas in which we would like to work more closely together.

The ENP is a new departure for us - it offers neighboring countries the opportunity to deepen their political cooperation and their economic integration with us in return for working together on issues of mutual concern. The principal objective is to promote an area of stability, prosperity and security for us all; and for those countries willing and able to participate, we offer the prospect of inclusion in internal EU programs and access to the biggest single market in the world.

Each Action Plan is negotiated and agreed directly with the government concerned. The Action Plan with Israel therefore reflects the relationship that we would like to develop with each other. This is why I am so encouraged; we have managed to strike a deal that brings concrete benefits to us both, and draws Israel closer to the EU than ever before.

What does it mean for Israelis?

The EU and Israel have committed themselves to working together in the battle against anti-Semitism, racism and xenophobia, and in protecting human rights and minorities. For example, we will work together on educating our peoples about the importance of tolerance and respect for all ethnic and religious groups. We will strengthen our cooperation in the fight against terrorism and on the non-proliferation of weapons of mass destruction.

Both parties also promised to work together on the settlement of the Israeli/Palestinian conflict using the road map, and aiming for a permanent two-state solution. Through this commitment and by seizing the opportunity afforded by the Palestinian elections, I am certain we will be able to work together to reanimate the Middle East peace process.

In the economic sphere, Israel stands to benefit more immediately than some of our other partners, since it has a functioning market economy that is already well-suited to an advanced level of integration with that of the EU. Among a whole host of issues, the Action Plan envisages the EU eventually creating a free-trade zone for services, particularly financial services, thus enabling Israeli firms to compete with ours in areas that were previously closed.

The plan also covers a number of other areas, including migration, the fight against organized crime and trafficking in human beings. Soon Israelis will be able to join our other programs, ranging from the cultural to the public health spheres.

Finally, let me highlight the strengthening of people-to-people contacts. The ENP is not only about activities for governments and institutions, it is also about people. In 2005, the Israeli Government and the EU will co-organize a symposium of intellectuals, politicians, experts and journalists to discuss other joint activities.

In sum, I believe the Action Plan affords us a remarkable opportunity to deepen EU-Israeli relations in practical and mutually advantageous ways. And, against the backdrop of international events, I sense the timing is fortuitous. We will continue to disagree on some points, but I am sure that the increased level of confidence we have in one another, thanks to this plan, will enable us to discuss those points more frankly and openly than in the past.

I am proud to be involved in this significant upgrading of our relations, and I look forward to reviewing progress and experiencing in person the newly found warmth in our relations when I visit next year.

The writer is the EU's commissioner for External Relations and European Neighborhood Policy.