The Prime Minister's Office expressed its displeasure on Saturday over a European Union decision to meet with a number of moderate non-Hamas ministers in the Palestinian Authority's new unity government. The move is seen as a step by Europe toward establishing relations with the PA government, which Israel rejects. The policy split between Israel and Europe on this issue emerged as Prime Minister Ehud Olmert prepared to welcome Chancellor Angela Merkel of Germany, whose country holds the EU presidency. In speaking against the EU's decision on Saturday night with The Jerusalem Post, a source in the Prime Minister's Office said: "It's not possible to separate these ministers from the governments they serve." The source added that the topic would likely be raised in talks between Olmert and Merkel on Sunday. Before arriving in Israel from Jordan, Merkel urged the Palestinian Authority to meet the demands of the international community and adhere to the Quartet's three principles: To recognize Israel, renounce violence and recognize past international agreements. But the PA's refusal to do so did not stop EU foreign ministers who met in Bremen, Germany on Saturday from agreeing to meet with a number of the PA's moderate, non-Hamas leaders, such as Foreign Minister Ziad Abu Amr and Finance Minister Salaam Fayad. France this week is set to welcome the new PA foreign minister, who is scheduled to meet French Foreign Minister Philippe Douste-Blazy on Monday and Prime Minister Dominique de Villepin. European Commisioner of External Relations Benita Ferrero-Waldner has invited Fayad to Brussels on April 11. EU foreign policy chief Javier Solana defended the move. "We don't see any reason why we should not continue to see someone whom we have known for many, many years, who has been cooperating with us," Solana said. "I see no reason to cut contacts... They're friends, we continue to cooperate with them." PA Information Minister Mustafa Barghouti welcomed the step, but said he disagreed with the decision to "discriminate" among members of the Palestinian cabinet. Willingness "to deal with the government is a positive step, even though discrimination between ministers is not accepted," he said. "We hope that this decision of dealing with certain ministers will change." In mid-March, Israel's cabinet voted to boycott the PA government and all its ministers, except for PA Chairman Mahmoud Abbas. A government source told The Jerusalem Post it has not changed its position since then and therefore disapproved of the EU's decision on Saturday. Even if the ministers are not members of Hamas, they still serve in a government that has refused to recognize Israel and has not denounced violence against it, the source said. But on Saturday, the European foreign ministers agreed they would judge the new government by its actions rather than its words, and progressively help it build up credible government institutions. Looking at the broader prospects for peace, Solana said he was hopeful that an end to the violence between Israelis and Palestinians was in sight. He said he believed that the decision at the Arab League summit last week to revive its 2002 peace initiative was a sign of the potential change on the horizons. "The Arab League for the first time in many years has assumed the responsibility to be more active in the peace process," Solana said. "If you put that together with the reaction of Prime Minister Ehud Olmert, the two things... are beginning to construct the dynamic that could lead to the settlement of a crisis that has been with us for many years." The Arab initiative calls for full recognition of Israel by the Arab world in return for an Israeli withdrawal from all territories captured in the 1967 Middle East war and a "just solution" for Palestinian refugees along the lines of UN Resolution 194, which states that they "should be permitted to return" to their homes. "I think after the meeting in Riyadh (Arab nations) will be constructive and active in moving the peace process forward," Solana told reporters at the end of a meeting of EU foreign ministers. "The moment in which we are living is a moment of hope that we may be able to move the process of a comprehensive peace forward." In Israeli media interviews, Olmert has praised the Arab plan as a major breakthrough in Arab relations with the Jewish state, but has flatly rejected its call for the return of Palestinian refugees. He is expected to make comments along those lines at the start of Sunday's cabinet meeting. He is also expected to bring up the topic of the Arab League initiative with Merkel. The two leaders are also likely to discuss Iran and the necessity of continued diplomatic efforts to thwart Iran's nuclear program. While in Israel, Merkel will also meet with Foreign Minister Tzipi Livni, visit Yad Vashem, and talk with Abbas. Like Solana, German officials have said the Arab Summit decision signaled new momentum in attempts to solve the Arab-Israeli conflict. Separately, US House Speaker Nancy Pelosi arrived in Israel on Friday and is scheduled to meet with Olmert, Livni and Acting President and Knesset Speaker Dalia Itzik.