The European Union Monday offered to provide an unprecedented package of European political, economic and security support to both Israelis and Palestinians in the context of a final status agreement. "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, " said the EU Foreign Affairs Council which is meeting here today in a statement. Brussels also offered closer cultural and scientific links, facilitation of trade and investments as well as political dialogue and security cooperation to both parties. The Council said that it will work on concrete proposals, including by building on previous work undertaken on EU contributions to Palestinian state-building, regional issues, refugees, security and Jerusalem. "The EU is convinced of the positive role that countries in the region can play in advancing the peace process, and remains committed to the on-going dialogue with the Arab States, including with regard to achieving peace in the Middle East," said the statement. The Council reiterated the strategic importance of the Arab Peace Initiative for all parties and for the entire region. The statement "deplored Israel's continuous expansion of settlements, which are illegal under international law and constitute an obstacle to peace. The Council also expresses its grave concern regarding incitement, incidents of violence in the occupied territory, house demolitions and the deteriorating humanitarian situation in Gaza." "The EU expresses its serious concern about actions that undermine the status quo of the holy sites, including in Jerusalem. The European Union will continue to closely monitor the situation and its broader implications, and act accordingly," added the statement.