Israeli officials welcomed an agreement authored Monday by Israel, the European Union, and Muslim Mediterranean countries condemning terror "in all its manifestations" and stating that "terrorism can never be justified." The Code of Conduct on Countering Terrorism was hammered out during the Euro-Mediterranean Partnership Conference in Barcelona, in which Europe stood with Israel against Arab demands for diluting the document so that attacks by those "under foreign occupation" would essentially be exempted. Syria, Lebanon, Algeria, Egypt, Tunisia, Turkey, Morocco, Jordan and the Palestinian Authority joined Israel and the 25 EU member states in issuing the document. However, British Prime Minister Tony Blair, the summit host, dropped a formal "common vision" statement, following deep divisions between the EU, Israel, and Arab countries over the Middle East process. The statement concerned the EU's plan to revamp relations with its southern neighbors by linking aid more directly to democratic, economic and political reforms. The Euro-Mediterranean forum, which allows for rare multilateral dialogue between Israel and her Arab neighbors, enabled a high-level Israeli and Palestinian meeting. Finance Minister Ehud Olmert held a half-hour discussion with PA Chairman Mahmoud Abbas Sunday night. Olmert pressed Abbas on the danger posed by Hamas, the upcoming Palestinian elections and joint economic projects between the two sides. Olmert and Palestinian officials are scheduled to meet again on Friday at the G-8 meetings in London at which Israelis and Palestinians will address the body. Negotiations over the resolution were tense in the afternoon Sunday, as the European hosts pushed to ensure that some tangible agreement came out of the two-day meeting. The Euro-Mediterranean Partnership was set up 10 years ago to bring the EU members, Middle East states and North African countries together. An earlier draft declared that "all peoples have the right of self-determination" but that "terrorist attacks cannot be justified or legitimized by any cause or grievance." Arab states agreed to drop the reference to "the right of people under foreign occupation to strive to end it in accordance with international law" after the EU cut out the issue of self-determination entirely. The code of conduct calls for the "eradication" of terrorism, the exchange of information to disrupt terror networks, the cutting off of funding and weapons for terror groups, and the refusal to grant asylum to terrorists. It also says that, "Our response must remain proportionate and solidly anchored within international and domestic legal frameworks that ensure respect for human rights and fundamental freedoms." "We are very content" with the resolution as well as the Europeans taking a "very close" position to Israel throughout the drafting process, Israeli diplomat Jackie Eldan told The Jerusalem Post by phone from Barcelona. Eldan, the spokesman for the Israeli embassy in Madrid, dismissed as "unimportant" a reported comment by an aide to Spanish Prime Minister Jose-Luis Rodriguez Zapatero suggesting that Israel was at fault for holding up agreement on resolutions. Eldan noted that the comment was made in a closed meeting in which a microphone had inadvertently been left on, and had no bearing on the outcome of the event. He described the conference as free "from the normal syndrome" of blaming Israel and its policies vis-a-vis Palestinians for obstacles in negotiations. Blair expressed satisfaction with what was achieved. "The fact that we got the practical agreement on the code of conduct from everybody is a very significant step forward indeed," he said at a news conference in Barcelona. "I think this is very important, both for the European countries, but also for our other colleagues around the table. It's as strong a statement as you can possible have on the unified determination to fight terrorism in all its forms." Speaking in Berlin, EU Justice Commissioner Franco Frattini said the Euro-Mediterranean code of conduct could trigger a breakthrough in UN efforts to agree on a definition of terrorism and a code of conduct for governments worldwide. "It will not automatically be translated into the UN convention, but I am convinced it will pave the way," he told reporters at a Berlin security conference. The Associated Press contributed to this report.