BRUSSELS (AFP) - Israel must back the creation of a Palestinian state and recommit to the Middle East peace process before the EU can deepen ties with the Jewish state, the European Commission said Thursday. We believe that good and trustful relations with Israel are essential in order to make our voice heard, the EUs External Relations Commissioner Benita Ferrero-Waldner told reporters in Brussels. We do not believe, however, that the time is indeed ripe to go beyond the current level of relations, she added. Too much remains unclear at this current point in time. And we expect indeed a clear commitment from the new government to pursue the negotiations with the Palestinians, EU commissioner Ferrero-Waldner said. We expect a stop of all activities undermining our objective of a two-state solution, she added, citing the expansion of Israeli settlements in the Palestinian territories which is continuing on a daily basis. Israel knows what we have to offer and we have shown our very good will and our commitment to reinforce our relations but we think that the ball is now in the court of Israel, she said. Ferrero-Waldner was speaking as the commission published reports on its neighbourhood policy detailing ties and problems beyond its borders. In Israel, the report said, progress on promoting democracy, the rule of law and human rights was limited as was cooperation with the EU on a comprehensive settlement of the Israel-Palestinian conflict. Any consideration of bilateral EU-Israel relations... must take into account overall political developments in the Middle East, the report stressed. The now-stalled plan to upgrade ties included a multiplication of bilateral meetings including at foreign ministers level, with the EU presidency also able to invite Israeli diplomats to EU security meetings held among ambassadors. The EU in December also said it would consider inviting Israel to take part in the civilian missions linked to its security and defence policy. The European Union is the biggest supplier of aid to the Palestinian territories but it has little leverage in its dealings with Israel, which is amply supported by the United States.