A text, seen by The Daily Telegraph, warned of EU “readiness, when appropriate, to recognize a Palestinian state” increasing the international pressure on Israel following the effective collapse of direct Middle East peace talks last week.

Mahmoud Abbas, the Palestinian president, on Monday called “on the EU to take a step towards recognition of the state of Palestine based on the 1967 borders”.

“We hope that the EU will take this step to maintain the requirements for the success of the peace process, which was thwarted by Israel,” said Saeb Erakat, the chief Palestinian negotiator.

There has been a week of intense EU diplomacy after an initiative by the so-called “quint” of Britain, France, Germany, Italy and the US, to push Israel into negotiations.

“There is growing frustration with Israel after its refusal to commit to a new settlements freeze and patience is running out,” said a European diplomat.

During talks over the weekend EU countries, including the Netherlands, Czech Republic, Hungary, Bulgaria, Romania, Sweden, Ireland, Greece, Luxembourg and Finland urged a tougher EU stance.

Some countries argued that unless Israel reinstated a ban on new Jewish settlements in Palestinian territories by next spring then the EU should recognise an independent state of Palestine with a seat at the United Nations.

The hardening EU line has heightened Israeli fears that the Palestinian leadership is inexorably gaining support for its efforts to take charge of its own destiny after over 40 years of occupation in the West Bank.

Earlier this month, Brazil, Argentina and Uruguay defied US displeasure and frantic Israeli lobbying by formally recognising a Palestinian state on territory captured by Israel during the Six Day War of 1967.

In a letter to Baroness Aston, the EU foreign minister, the Palestinian Authority “affirmed the need for a EU recognition of two states along the 1967 borders and to oblige the Israeli government to completely halt settlement activity, including in east Jerusalem”.

“Such a step by the EU would provide protection for the principle of two states as well as for the peace process,” said the letter.

Israel yesterday (Mon) secured a partial diplomatic victory, with British support, after the EU statement was watered down but a communiqué agreed by all Europe’s foreign ministers hinted that recognition of Palestine was a future option.

“We welcome the World Bank’s assessment that ‘if the Palestinian Authority maintains its current performance it is well positioned for the establishment of a state at any point in the near future,” said the EU statement.

The shift in European policy came as President Barack Obama, scarred by last week’s humiliating acknowledgment that his efforts to revive peace talks had failed, resumed US attempts to press Israel into making concessions.

During direct talks that took place in September, Benjamin Netanyahu, the Israeli prime minister, demanded that the core issues dividing the Israeli and Palestinian sides be discussed sequentially, with Israeli security concerns first on the agenda.

In a change of tack, the US is now demanding that all issues be discussed simultaneously through an American mediator, forcing Mr Netanyahu to confront matters he would rather have avoided.

Washington’s Middle East envoy, George Mitchell, arrived in Israel yesterday in an attempt to save negotiations.

While America refrained from blaming Israel for the collapse of direct talks, the EU had no such qualms, with ministers condemning Mr Netanyahu’s refusal to stop settlement building for three months. The criticism drew a furious response from Israel.

“It is very curious that the US administration, which has been leading the negotiations, did not find it necessary to blame any of the parties,” said Yigal Palmor, a spokesman for the Israeli foreign ministry.

“We all know that the EU wants to be taken more seriously by both parties in the political process. One cannot but wonder how this blatantly one-sided position can contribute to the advancement of the EU’s credibility with Israel.”