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The European Union (EU) issued an oblique threat on Sunday to the incoming government of Prime Minister-designate Binyamin Netanyahu over the issue of a new Palestinian Authority (PA) state.

EU foreign policy chief Javier Solana told reporters that the European body of nations would change its relationship significantly with the Jewish State if the Netanyahu government does not back the establishment of a new Arab state within Israel's current borders.

PA and Egyptian officials met with Solana and other EU representatives in an attempt to find ways to form a unity government between the Fatah faction and the Hamas terrorist organization.

Numerous attempts by Egyptian and Saudi Arabian leaders to achieve that goal have failed thus far, leaving the PA government split between Hamas ruling Gaza, and Fatah ruling parts of Judea and Samaria.

"Let me say very clearly that the way the European Union will relate to a government that is not committed to a two-state solution will be very, very different," Solana said.

Late Sunday night, Netanyahu's Likud party signed a coalition agreement with the Yisrael Beiteinu (Israel is Our Home) party, led by Avigdor Lieberman, who is set to become Foreign Minister.

Although Lieberman is seen by some as a right-wing conservative, he has expressed support for the idea of Israel giving up blocs of land and swapping Jewish and Arab populations in areas of Judea and Samaria. The Yisrael Beiteinu chairman has backed the plan as the best option to maximize Jewish demographics in Israel while providing the Palestinian Authority with land for a new state.

International media has in some respects demonized Lieberman and the prospect of his installation as Israel's next Foreign Minister.

According to the Associated Press, "Lieberman has said Palestinian prisoners should be drowned in the Dead Sea, that Israeli-Arab lawmakers meeting with Palestinian militants should be executed and that the president of Egypt could 'go to hell.'"

The news agency also reported that Lieberman's party, which is now the third-largest party in the Knesset, calls for legislation to "require members of Israel's Arab minority to swear loyalty to the Jewish state or lose their citizenship."

In fact, the party's platform calls for the establishment of a pledge of allegiance to be administered to every citizen and prospective citizen in the country, regardless of ethnicity or religious background.

Meanwhile, the EU has yet to keep the promise it made at an Egyptian-hosted summit in Sharm el-Sheikh in January to help prevent arms smuggling into Gaza.

Israel ended its counterterrorist Operation Cast Lead on January 18, partly on the strength of commitments by Western nations to prevent Hamas terrorists from replenishing their weapons supplies. Nevertheless, Hamas has succeeded in smuggling in new weapons, according to the latest intelligence reports by the Israel Security Agency (Shin Bet).