The European Union urged Prime Minister-designate Binyamin Netanyahu on Sunday to craft a government that embraces the long-standing goal of an independent Palestinian state living side by side with Israel. The prospect of a new hawkish government, with Israel Beiteinu chairman Avigdor Lieberman as a possible foreign minister, will be seen in Europe as a setback to the Middle East peace process. "Let me say very clearly that the way the European Union will relate to an [Israeli] government that is not committed to a two-state solution will be very, very different," said Javier Solana, the EU's foreign and security affairs chief. US, European and moderate Arab officials have largely remained silent about the possibility of Lieberman becoming Israel's top diplomat. But as Netanyahu is in the final stages of crafting a coalition government based on the Feb. 10 election outcome that prospect could become a reality this week. Solana and other EU officials met with the foreign ministers of Egypt and the Palestinian authority to discuss the formation of a Palestinian unity government - bringing the rival Hamas and Fatah factions under one roof - and rebuilding the Gaza Strip after Israel's recent offensive. Hamas says power-sharing talks with its Palestinian rival Fatah are stuck on disagreements over the political program of a future government. Palestinian Foreign Minister Riad Malki said the international community must not remain silent about the prospect of a far right Israeli government. 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 international community has to take its responsibility and also to address this issue very seriously," Malki told a new conference after the talks at the EU. EU and American officials fear Lieberman's outspokenness will do nothing to revive the stalled peace process. "We hoped to see an agreement [on a Palestinian unity government] before the end of the month," said Karel Schwarzenberg, the Czech Foreign Minister, who chaired the talks. He added such a government must abide by past peace commitments "and we expect the same respect ... from the new government of Israel."