The European Parliament supports the creation of a Palestinian state within the 1967 borders with agreed land swaps, its president said Wednesday. It embraced the vision for peace in the Middle East as outlined by U.S. President Barack Obama in a May 19 address in Washington, European Parliament President Jerzy Buzek said.

Addressing the Knesset in Jerusalem, Buzek however reiterated direct peace negotiations were the "only solution."

In Ramallah on Tuesday, he said the parliament opposed Palestinian plans to seek United Nations recognition in September of their state in the West Bank and Gaza, without negotiating this with Israel.

The Palestinians have said negotiations with of Prime Minister Benjamin Netanyahu are conditional on a freeze of Israeli construction in the occupied West Bank and East Jerusalem, fearing that settlements will continue to expand unchecked as talks crawl on indefinitely.

Washington and some European states, including Germany and Italy, are pressuring the Palestinians to put off the UN vote, and Israel to take steps that would help persuade them to do so.

"Israel has a fundamental right to exist," Buzek, who also devoted much of his speech to the Holocaust, told the Knesset. "Immediate progress in peace negotiations is more needed today than ever," he said. "We cannot afford the status quo."

But he backed the Palestinians on the issue of Jerusalem, explicitly saying East Jerusalem should become the capital of their state.

Netanyahu recently rejected dividing Jerusalem and an almost full Israeli withdrawal to the "indefensible" lines of before the 1967 war, when Israel captured the West Bank from Jordan and Gaza from Egypt.

Buzek, a 70-year-old Polish liberal-conservative, on Monday visited the Gaza Strip, where he urged Israel fully lift its blockade of the enclave.