EU drops call for east Jerusalem to be named Palestinian capital

At a meeting in Brussels, they instead said that Palestinian territory must simply include part of the city.

Israel reacted with relief that a concerted campaign by its diplomats persuaded European foreign ministers to stop short of endorsing the division of half the city as the Palestinian capital.

An Israeli foreign ministry statement said: "In light of the extreme draft originally presented by the Swedish presidency at the start of discussions, Israel does welcome the fact that at the end of the process the voices of the responsible and reasonable EU states prevailed, balancing and improving the text."

Carl Bildt, the Swedish Foreign Minister and chairman of the meeting, warned that the EU was opposed to Israeli efforts to increase the Jewish population of east Jerusalem, which was annexed in 1967.

"We are deeply concerned about the situation in east Jerusalem," he said. "We call on the Israeli government to cease all discriminatory treatment of the Palestinians in east Jerusalem."

However Nir Bukarat, the mayor of Jerusalem, condemned the statement as a prescription for the division of the ancient city.