The Palestinian demand for a right of return for refugees is a central obstacle to the peace process, EU Commissioner for Development and Humanitarian Aid Louis Michel told The Jerusalem Post over the weekend. "I think the Arab peace plans have to be explained properly to the Israelis," he said. "We all know that the problem is the return of the refugees, for both the Israelis and the Palestinians. It will need to be resolved in an agreement on the final status. Now we need to put ideas forward to resolve these kinds of problems without killing the solution entirely." Michel, who is in the middle of a four-day visit to the region to explore humanitarian issues connected to the Israeli-Palestinian conflict and Iraqi refugees, will next travel to Jordan and Syria. Michel met with Foreign Minister Tzipi Livni on Thursday, a day after meeting with Palestinian Authority Deputy Prime Minister Azzam al-Ahmad. He is scheduled to meet with PA Chairman Mahmoud Abbas in Jordan. Michel would not comment directly on the Arab peace initiative, or on the original Saudi draft, but said they were a part of his discussions and that he was concerned that there was not a "strong political will" to move forward at present. He said both sides would need to make concessions if the peace process were to advance. "There will be a long way ahead, and their positions are still very far from each other," Michel said. "The question is, can we move the process forward? Can we make life easier for the Palestinians and the Israelis?" On Wednesday, Prime Minister Ehud Olmert said he was prepared to sit at the negotiating table and discuss the Arab peace initiatives "with no preconditions." Olmert said he "would not accept everything" but that he would also not reject anything ahead of time. Michel met with representatives of Palestinian and Israeli NGOs in the West Bank to discuss humanitarian issues. The European Commission's humanitarian aid department that Michel controls grants some 84 million euros in assistance to the Palestinians each year. Since 2000, the Commission has provided more than 333 million euros in aid to the Palestinians. That funding, said Michel, is likely to increase this year. On Thursday, Karen AbuZayd, commissioner-general for the UN Relief and Works Agency for Palestinian refugees in the Near East (UNRWA), said the UN needed to do more to provide aid. AbuZayd said her organization urgently needed $246m. in emergency funding to continue providing services and aid to 4.4 million Palestine refugees living in the West Bank, Gaza Strip, Lebanon, Syria and Jordan. She cited the Arab League peace initiative and formation of a Palestinian national unity government as positive signs that required a "reward" from the international community. "The EU is the biggest aid donor in the West Bank and Gaza," said Michel. He added, however, that the success of Hamas in January 2006's parliamentary election had "changed the picture" of how and where aide was provided. "We do not finance the Palestinian Authority directly, and that has dramatic consequences on our ability to provide aid. I do no think this will be changing for the moment," said Michel. He reiterated that the PA government had to meet EU condition before a resumption of direct aid, including recognition of the State of Israel and controlling the Hamas military wing. Michel said that in meetings with PA officials, he stressed that releasing kidnapped Cpl. Gilad Schalit and BBC reporter Alan Johnston was crucial to advancing the peace process. "I was favorably impressed with the response [of Ahmad]," said Michel. "He said he would use all the means and all the resources at his disposal." On Thursday, the European Parliament added its voice to calls for the release of Johnston, who is the only foreign correspondent based in Gaza, and has not been heard of since he was abducted on March 12.