Italian Prime Minister Silvio Berlusconi on Monday declared his opposition to a bid by the Palestinians for UN membership, earning thanks from his Israeli counterpart Benjamin Netanyahu.
"We do not believe that a unilateral solution can help peace, neither on the Palestinian side nor on the Israeli side. I believe peace can only be reached with a common initiative through negotiations. So I therefore reject unilateral solutions," Berlusconi told reporters following talks with Netanyahu in Rome.
He said Israel's recognition by the Palestinian Islamist group Hamas is a "priority objective" for peace between the Palestinian people and the Jewish state.
Berlusconi said he supported initiating a Marshall Plan to build a Palestinian state economically. Ten Italian companies have agreed to open factories in the West Bank, and ten tourism companies agreed to come to the West Bank to encourage Italian tourism.
"I want to thank you for your clear position against the attempt to bypass peace negotiations. Peace will only come through negotiations," Netanyahu said.
Israel had "no better friend" than Berlusconi, he added.
"He is a great friend of the Jewish people and of Israel," adding that the Rome summit had "strengthened this important friendship".
Netanyahu is seeking international support for Israel after Palestinian Authority President Mahmoud Abbas said he will seek recognition for a Palestinian state at the UN's General Assembly meeting in September.
Asked by journalists if Israel intends to stop building new settlements in the West Bank, Netanyahu claimed the problem was a failure to recognize the Jewish State.
"Many people think the settlements are the root of the conflict, but this is not so. The root of the Israeli-Palestinian conflict is the refusal to recognize Israel's right to exist," he said.
"If Palestinian Authirity President Mahmoud Abbas recognizes Israel, there will be peace," he added.
Following a joint Italian-Israeli cabinet meeting, eight Israeli ministers signed agreements with their Italian counterparts. Such a meeting was also held in February 2010 in Jerusalem, and another is planned for next year in Jerusalem.
A two-day Israel-Italy business forum will open this week in Milan, is expected to be attended by more than 500 businesspeople from both countries.
On Tuesday, Netanyahu was scheduled to meet with Rome Mayor Gianni Alemanno who promoted a campaign for the release of Gilad Shalit, hanging a large poster of the kidnapped soldier in the Town Hall square.