Foreign ministers from the 27 EU member states faced a complex agenda as they met in Luxembourg, staking out cautious positions in response to developments in Iran and Israel.

The ministers extended an invitation to Moldova to hold talks on a new cooperation agreement as soon as the EU is satisfied Chisinau is committed to reforms.

The Western Balkans were also high on the agenda.

The initial reactions of major EU governments to the unrest in Iran which has followed presidential elections were cautious.

After the EU foreign ministers' meeting, the bloc's foreign policy chief, Javier Solana, issued a carefully worded statement noting that the EU is keeping a close eye on developments, but intends to take no particular action.

"We are concerned with the events which have taken place after the elections," Solana said. "We would like very much that the voice of the people is the voice [which] will count. In any case, with Iran we would like a solid relationship.

Solana added, "We have a lot of things to do together -- not only the nuclear dossier, but many other dossiers which are important for the international community as a whole and for the relationship between the European Union and Iran."

The French foreign minister, Bernard Kouchner, has said Paris is "very concerned" by the violence that followed the June 12 elections.

Kouchner also deplored the "somewhat heavy-handed" official response to the demonstrations which were sparked by the announcement that the hard-line incumbent, Mahmud Ahmadinejad, had defeated Mir Hossein Musavi, who had run on a reformist ticket.

Hundreds of thousands of people gathered in Tehran today for continued protests in support of Musavi, and shots were reported into the crowd, possibly killing one and injuring others.

In Berlin, Foreign Minister Frank-Walter Steinmeier on June 14 had criticized the Iranian government's use of force against demonstrators and called for allegations of vote-rigging to be investigated.

"The election procedures leave many questions open," Steinmeier said. "Reports exist stating irregularities. We ask Iran to clarify these irregularities immediately and completely. Besides that, the behavior of the Iranian security forces toward the protesters is unacceptable."

The EU's Czech presidency issued a statement on June 14 saying it was "concerned about alleged irregularities during the election process and postelectional violence."

In reacting to the events in Iran, EU policy makers will seek a balance between the bloc's deep suspicion of Ahmadinejad's record and intentions and its ambition to play a role in ensuring that Tehran's nuclear ambitions do not lead to a war.

As the EU foreign ministers gathered in Luxembourg, they also delivered the bloc's first response to Israeli Prime Minister Binyamin Netanyahu's speech on June 14 accepting for the first time the notion of a Palestinian state.

Speaking to journalists after the meeting in Luxembourg, Solana skirted over the most significant ambiguities in Netanyahu's speech, giving it a broad welcome, but also hinting the EU expects further movement on key issues of contention.

"I think we have welcomed the fact that what was not happening three weeks ago [did happen] yesterday [when Netanyahu] recognized that the only solution for peace in the Middle East is what we have defended for a long time with many other members of the international community and in particular the United States -- [that is, a] two-state solution," Solana said.

A number of countries in the bloc are questioning whether the conditions set by Netanyahu -- including a demand that the future Palestinian state be demilitarized and exercise no control over its airspace -- meet its definition of statehood.

The bloc has repeatedly said it wants an "independent, viable, and democratic" Palestinian state.

EU states have been split in recent months over whether to upgrade the current EU-Israel Association Agreement. Sweden, Belgium, and Ireland -- with backing from Britain and France -- remain skeptical. Germany, Italy, Romania, and the Czech Republic want to go ahead with closer cooperation.

The EU has also demanded that Israel halt all expansion of settlement activity in the West Bank -- a call which Netanyahu appears to have sidestepped by saying "natural growth" of settlements will continue.

Solana said the freeze should also cover "natural growth."

The situation in the Gaza Strip, currently blockaded by Israel, also commands great public attention in the EU. The EU external relations commissioner Benita Ferrero-Waldner said Israel's Foreign Minister Avigdor Lieberman, in Luxembourg for an EU-Israel meeting later in the day, had told her some border points with Gaza would be reopened.

An EU delegation headed by the Czech Foreign Minister Jan Kohout was expected to meet with Lieberman late in the day.

Eye On Chisinau

The EU foreign ministers also adopted a declaration on Moldova.

The document amounts to a quid pro quo offer of an upgrade in relations if Chisinau is prepared to draw the right lessons from the violence which followed the April 5 parliamentary elections and ensure that their rerun later this summer will be "free and fair."

The EU is holding out the prospect of negotiating an Association Agreement with Moldova, to replace the current Partnership and Cooperation Agreement. The new accord could herald the introduction of free trade and visa-free travel within the EU for Moldovan citizens.

In the longer term, EU officials have repeatedly indicated that closer cooperation could help prepare the country for eventual EU membership -- although no such prospect is currently formally on the table.

The EU said it is willing to start talks on the new accord "as soon as circumstances allow."

The "circumstances" include the expectation on the part of the EU that Moldova will reverse a decision to impose visas on Romanians and will in future "ensure equal treatment to all EU citizens in its visa policy" and return to the "principle of good-neighborly relations" with a country that, though unnamed, is assumed to be Romania.

The declaration expresses "serious concern over human rights abuses" in Moldova after the parliamentary elections of April 5 and asks Chisinau to allow international experts to investigate these events.

The EU "underlines that the use of violence for political aims is unacceptable."

The EU also voices "concern" over what it sees as a "deterioration of freedom of expression and media freedom," and calls on the government to allow all parties equal access to public media and to refrain from pressure against private outlets.

On Moldova's pro-Moscow separatist region of Transdniester, the declaration underscores that the "5+2 framework" for negotiations -- grouping Russia, Ukraine, the United States, the EU, and the OSCE, as well as the Moldovan and Transdniestrian sides -- remains "the only format that can guarantee the necessary transparency and legitimacy."

In other words, the EU is keen to ensure that it itself -- together with the United States -- will continue to play a role in the process which has, in recent months, appeared to be increasingly directed by Russia.

Balkan Strains

The EU ministers also debated the Western Balkans. After intense EU mediation efforts, Croatia and Slovenia are said to be close to resolving their border dispute, which has seen Zagreb's EU accession talks grind to a halt.

Serge Brammertz, the chief prosecutor of the International Criminal Tribunal for the former Yugoslavia (ICTY), briefed the EU ministers about Serbia's cooperation.

Serbia's hopes of integration with the EU have been held up by Belgrade's inability to apprehend its last remaining high-profile war crimes suspect, former Bosnian Serb army commander Ratko Mladic.

New video footage which emerged in Bosnia-Herzegovina last week, purporting to show Mladic relaxing in a Serbian setting, is unlikely to have improved the willingness of the Netherlands and Belgium to unblock the signing of an EU-Serbian Stability and Association Agreement -- an indispensable step on the road to candidate status.

The Czech Foreign Minister Jan Kohout said after the meeting that the ministers had given the green light to the EU executive to start making preparations to lift the visa requirement on the most advanced of the Western Balkan states.

"A discussion was held on visa liberalization with regard to Albania, Bosnia-Herzegovina, the Former Yugoslav Republic of Macedonia, Montenegro, and Serbia in light of the progress made by these countries," Kohout said. "The ministers encouraged the [European] Commission to start dismantling the [EU] visa requirement for those countries that have met all benchmarks with a view of achieving a visa-free regime with them, ideally by the end of this year."

It is understood that Macedonia, Serbia and Montenegro are seen as the countries realistically making that cut.

A debate on Georgia, initially scheduled for the Luxembourg meeting, has been postponed until next month due to complications with extending the mandate of the United Nations' Georgian monitoring mission, and the unclear future of the EU's own monitoring mission.