Sweden's Prime Minister Stefan Loefven and PA chairman Mahmoud Abbas in Stockholm
Sweden's Prime Minister Stefan Loefven and PA chairman Mahmoud Abbas in StockholmReuters

Sweden announced a multi-million-euro aid package for the Palestinian Authority (PA) on Tuesday as PA chairman Mahmoud Abbas made his first visit to Stockholm since 2009.

Prime Minister Stefan Loefven stressed that his country’s recognition of “Palestine” back in October, when it became the first major Western European country to do so, came with responsibilities.

"According to us Palestine is now a state. Our expectations of Palestine and their leadership will therefore increase," Loefven told reporters during Abbas' visit to Stockholm, according to the AFP news agency.

"There is no contradiction between keeping good relations with Palestine and keeping good relations with Israel," Loefven added.

The announcement of Sweden's recognition of "Palestine" in late October saw withering verbal jabs about IKEA furniture between Foreign Minister Avigdor Liberman and Swedish Foreign Minister Margot Wallstrom, as well as Swedish financial institutions boycotting Israeli companies. Israel also temporarily withdrew its ambassador from Stockholm.

Wallstrom at one point announced she was indefinitely postponing a planned trip to Israel, and on Thursday, Israel said that Wallstrom was not welcome for an official visit in the country.

The Swedish Foreign Minister later accused Israel of “irritating its allies” with its reaction to her country’s recognition of “Palestine” and added, "It is unacceptable how they have been talking about us and everybody else."

Loefven on Tuesday announced a new aid program to the Palestinians worth 1.5 billion kronor ($180 million).

The deal stretches until 2019 and will go toward projects to fight corruption and promote gender equality and human rights, reported AFP.

Loefven said both the PA and Israel must be "ready to compromise" and that Sweden would support “Palestine” in "setting a regional example when it comes to women's rights."

Abbas, who arrived late Monday, thanked Sweden for the aid package and expressed the wish that "other countries would also recognize Palestine as a state."

"I am reaching out to Israel because we cannot achieve peace if we don't sit down for negotiations," Abbas added.

Ahead of Abbas' visit, Israel's Stockholm Ambassador Isaac Bachman described the his diplomatic efforts as a "diversion" from direct talks with Israel.

According to the PA, around 135 countries have recognized the state of Palestine including several that are now EU members.