The European Union on Monday pledged "unprecedented" levels of support to both Israel and the Palestinians should the two parties reach a final status agreement.
Commending US Secretary of State John Kerry for his efforts in launching direct talks between the two, EU foreign ministers said the 28-nation bloc would "contribute substantially" to post-conflict arrangements to ensure the sustainability of a peace deal.
"The EU will provide an unprecedented package of European political, economic and security support to both parties in the context of a final status agreement," the ministers said in a statement.
"In the event of a final peace agreement the European Union will offer Israel and the future state of Palestine a Special Privileged Partnership including increased access to the European markets, closer cultural and scientific links, facilitation of trade and investments as well as promotion of business to business relations.
"Enhanced political dialogue and security cooperation will also be offered to both states," the statement added.
The US State Department welcomed the announcement saying it made the future for Israel and the Palestinians "even brighter."
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"Secretary Kerry has made clear how important it is for Israelis and Palestinians alike to envision the benefits that peace will bring," State Department deputy spokeswoman Marie Harf said in a statement.
"The vision of increased access to European markets, closer cultural and scientific links, facilitation of trade and investments and business-to-business engagement will help strengthen and expand the economies of Israel and of a future Palestinian state."
A senior EU official said it was too early to talk about numbers after Israeli daily Haaretz last week said the package would be worth "billions of euros" while also helping to end Israel's international isolation.
Kerry said this weekend that concrete progress has been made in peace talks between Israelis and Palestinians, but said details will be kept under wraps.
Calling on both sides to seize the chance to reach a two-state solution, the EU ministers also warned against "actions that undermine the negotiations", in particular deploring Israel's continuous expansion of settlements.
Last month the Jewish state agreed to join an EU scientific research project despite the fact it bars funding for any Israeli entity with operations beyond the 1967 Green Line.