Catherine Ashton met in Ramallah, West Bank, with Palestinian Authority Prime Minister Salam Fayyad on the same day.

Ashton confirmed the EU's strong commitment to both the Palestinian Authority and to a "democratic and viable Palestinian state." Statehood is "critical" for any lasting peace in the region, she said.

Ashton announced the allocation of €40 million in direct financial support from the EU to the Palestinian Authority. She said that the EU will consider further financial support in a few months.

She called on Israel to fully implement its revised policy toward Gaza, announced in the wake of public outcry over a deadly incident involving pro-Palestinian activists last month. She said the new policy -- which would allow more goods into Gaza - was necessary to improve the lives of people in Gaza.

Ashton also announced the launch of a joint recovery program which aims to support private sector development in Gaza territory in order to revitalize the economy. She called on Palestinians to overcome their differences in order to build their own state and said she would like to see the Palestinian Authority return to Gaza.