GAZA CITY: The European Union`s top diplomat Catherine Ashton called for the further easing of Israel`s four-year blockade of the Gaza Strip during a visit to the impoverished Hamas-run enclave on Sunday.

"The answer here is opening the crossings," Ashton told reporters on her first visit since Israel`s deadly May 31 seizure of a Gaza-bound aid fleet sparked international demands to lift the closure.

"People here recognise and understand the security needs of Israel," she said at a news conference held at a UN-run school for Palestinian refugees.

"But that should not prevent the ability to be able to see the free flow of goods into and out of Gaza in order that houses can be rebuilt, children can go to fully functioning schools and businesses can flourish."

She said the European Union was willing to send monitors to help operate the crossings, but they would have to have a clear role and work alongside the Western-backed Palestinian Authority, which Hamas drove out of Gaza in 2007.

However, she said there was "no proposal on the table" to reopen Gaza`s sole port.

At the height of the international uproar that followed the flotilla raid, in which nine Turkish activists were shot dead by naval commandos, Israel said it would begin allowing all purely civilian goods into Gaza.

It said it would also allow building materials into the territory but only for internationally supervised projects and that its naval blockade would remain in place to keep the Islamist Hamas movement from importing military-grade rockets and other weapons.

The European Union welcomed the changes but has pressed Israel to allow for freer travel and the export of goods manufactured in Gaza, where the near-collapse of the private sector has spawned 40 percent unemployment.

Later, Ashton travelled to Israel where she met with hardline Foreign Minister Avigdor Lieberman, reiterating her call for an end to the blockade, calling it "unacceptable, unsustainable and counter-productive."

Lieberman said he had briefed Ashton on Israel`s "new, liberal approach to Gaza" and called on the EU to support several large-scale infrastructure projects there "like power stations, desalination plants and water purification."

Israeli media had reported Lieberman was pushing these projects as a prelude to Israel, which supplies much of Gaza`s utilities, severing all ties to the Gaza Strip.

Lieberman said Israel was exploring such an idea but no formal decisions had been taken. "It is worthy of being seriously discussed but has not been adopted by the cabinet," he told reporters after the meeting.

Ashton expressed her opposition to such a move.

"I have consistently said the solution is a two state solution... and Gaza should be part of that," she said. "I made that position clear to Foreign Minister Lieberman."

Ashton was to meet with Prime Minister Benjamin Netanyahu later Sunday.

After departing Gaza she headed to the nearby Israeli town of Sderot, which suffered near-daily Palestinian rocket attacks in the years leading up to the 22-day Gaza war launched in December 2008.

The British baroness was named last year as the EU`s high representative for foreign affairs, a new position that was created to give the 27-nation bloc a single voice on the world stage.

Her visit came as US envoy George Mitchell held a sixth round of indirect peace talks between Israel and the West Bank Palestinian leadership in a bid to relaunch direct negotiations suspended during the Gaza war.

Palestinian president Mahmud Abbas has thus far rejected US and Israeli demands for face-to-face talks with Netanyahu, insisting the two sides first make progress on the thorny issues of final borders and security.

Israel first imposed its blockade on Gaza in June 2006 after Hamas and other militants captured Israeli soldier Gilad Shalit in a deadly cross-border raid. The 23-year-old is still being held at a secret location.

The sanctions were tightened a year later when Hamas drove Abbas`s forces out after months of factional unrest.

Ashton did not meet anyone from Hamas, which is blacklisted as a terrorist group by the West because of its refusal to recognise Israel and its commitment to armed struggle.

BDST: 1015 HRS, July 19, 2010