Italian Premier Silvio Berlusconi said on Tuesday that any new Israeli settlements in the Palestinian territories would be an obstacle to peace in the Middle East.

After meeting with visiting Israeli Prime Minister Benjamin Netanyahu in Rome, Berlusconi said he had "stressed the need to send significant signals on stopping settlements which represent an obstacle to peace."

At a joint press conference with Netanyahu, Berlusconi also said that Italy approved of Netanyahu's vision of a demilitarized Palestinian state, saying "we think this (state) should exist, just as we think Israel should be recognized" by Arab countries.

Netanyahu recently gave a provisional approval to a demilitarized Palestinian state, although the conditions he set disappointed Palestinians.

The Israeli prime minister said in Rome that he was "100 percent" behind Berlusconi's proposed "Marshall Plan" for the Palestinian territories.

"The time has come to work towards implementing the plan Berlusconi has been working on for a decade," Netanyahu told reporters.

At the press conference, both leaders mentioned the plan that involves boosting infrastructure and businesses to revive the Palestinian economy as well as increasing tourism to the Holy Land.

(Xinhua News Agency June 24, 2009)