BRUSSELS (AP) — The European Union said Monday that all its deals with Israel must "unequivocally and explicitly" show that they cannot apply to occupied territories, a move that builds on a November decision to label Israeli products made in the West Bank.

Palestinians welcomed the stance, while Israel accused the EU of discrimination.

Monday's meeting of 28 EU foreign ministers stressed that it "does not constitute a boycott of Israel which the EU strongly opposes."

Israel's Foreign Ministry said the EU statement had been "softened" thanks to lobbying by the ministry and by Israeli Prime Minister Benjamin Netanyahu, but said the EU had ignored the Palestinian Authority's responsibility for the freeze in peace negotiations.

"Out of about 200 border conflicts in the world, the European Union is choosing to discriminate only against Israel. This stance prevents the (European) Union from being a fair player in resolving the conflict," the Foreign Ministry statement said.

Palestinian official Saeb Erekat said the EU announcement was "a step forward toward accountability," but that Europe should take "immediate steps" such as banning the import of products made in Jewish settlements in the West Bank, and called on greater European involvement to end Israel's occupation of the West Bank.

Israel captured the West Bank and east Jerusalem in the 1967 Mideast war and began settling both areas shortly afterward. The Palestinians claim both areas as parts of a future state, a position that has global support.

The EU statement called the Israeli settlements illegal and an obstacle to peace.