In the hope of reviving the peace process Egyptian President Hosni Mubarak has urged Israel to revise its position over peace talks and settlement building in order to reach a final settlement with the Palestinians that ends the occupation and paves the way for a Palestinian state. In a meeting with Israeli Prime Minister Binyamin Netanyahu in the Red Sea resort of Sharm El-Sheikh, Mubarak, according to a statement released by the Cairo Press Centre, stressed Egypts rejection of further aggression against Gazans, warning of the latest Israeli threats and their repercussions on the stability and security of the region and the peace process in the Middle East. Under Netanyahus predecessor Ehud Olmert Israel attacked Gaza in 2008, killing over 1,400 Palestinians, including more than 300 children. Egypt was fiercely criticised at the time for its refusal to permanently open the Rafah border crossing. Meanwhile, a report by the heads of 25 European missions in Jerusalem and Ramallah urged Brussels to treat East Jerusalem as the future capital of a Palestinian state. It warned that Jewish settlement activity was undermining the Palestinian presence in East Jerusalem and making a two-state solution difficult. The report, leaked on Monday, calls for EU representatives to be present during the demolitions of Palestinian homes and when peaceful protesters face arrest. It is unclear if or when the recommendations will be adopted. The document was made public following the demolition of an East Jerusalem hotel to make way for 20 homes for Jewish settlers. The demolition was condemned by the US and the EU. US Secretary of State Hillary Clinton called it a disturbing development [that] undermines peace efforts to achieve the two-state solution. Netanyahu defended the demolition on Monday, saying it was a private real estate deal, and insisted that Jews had the right to live anywhere in Jerusalem. Israel annexed East Jerusalem in 1981. Under international law the area is occupied territory. Israel is undermining all Washingtons efforts and ending any possibility of a return to negotiations, said Nabil Abu Rudeina, spokesman for Palestinian President Mahmoud Abbas. Israel has no right to build in any part of East Jerusalem or on any Palestinian land occupied in 1967. In Brussels the efforts of Abbas and his aides seem to be paying off. A recent EU communique hinted that recognition of a Palestinian state is increasingly being seen as an option. European Union Foreign Policy Chief Catherine Ashton called last week for the Quartet to meet next month to help the Palestinians and Israelis overcome their deadlock. Attempts by the US to revive peace negotiations stalled last year, after Israel refused to end settlement building. On the other hand, Palestinians pursued Plan B after failed talks. Since the peace process has been based throughout on the 1967 borders we are asking countries to recognise us within these borders, says Palestinian negotiator Nabil Shaath, who accompanied Abbas on his trip to Brussels. This is revitalising and re-consecrating a principle that emanates from international law and all the agreements already signed. In recent weeks Chile and its neighbours Bolivia, Argentina and Ecuador, have officially recognised Palestine as an independent state within the 1967 borders - i.e., on the West Bank, including East Jerusalem, and Gaza. Uruguay says it will follow suit and Palestinian officials suggest at least two other countries are lined up to do the same. The moves have been condemned by Israel. Israeli Foreign Ministry spokesman Yigal Palmor insists that the Palestinians can only achieve statehood through a peace deal with Israel. The whole framework that has allowed us to negotiate so far is being breached, he said. Reports suggest that Israel has stepped up diplomatic activity, warning of the dangers of prematurely recognising Palestinian statehood. The US also opposes the Palestinian approach. This month the House of Representatives passed a resolution calling on Palestinian leaders to stop trying to gain recognition from other nations. It urged the US administration to deny any unilaterally declared Palestinian state and veto any resolution by the UN Security Council to establish or recognise a Palestinian state outside of an agreement negotiated by the two parties. Late Palestinian leader Yasser Arafat unilaterally declared a Palestinian state in 1988, winning recognition from many Arab, Communist and non-aligned states. US State Department spokesman Philip Crowley said Israeli envoy Yitzhak Molcho and Palestinian negotiator Saeb Erekat will come to Washington to meet separately with US officials as part of our ongoing consultations with the parties at the working level to achieve a framework agreement on all core issues. Crowley added that the two envoys will not meet with each other but that US Middle East envoy George Mitchell is expected to speak to each of them. Secretary of State Hillary Clinton, who is currently visiting the UAE, Oman and Qatar, may participate in these discussions, he said. Direct talks began on September 2 but stalled three weeks after Washington failed to secure Israels agreement to a new freeze on settlement building. Al-Ahram Weekly