EU reaches 'consensus' to blacklist Hamas

British Foreign Secretary Jack Straw told reporters the ministers had "taken a political decision to freeze the assets of Hamas", the effective consequence of the blacklisting.

Resuming for a second day of informal talks on Italy's Lake Garda, the ministers were also set to discuss growing concern over Iran's nuclear capability.

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Security was again tight as anti-globalisation protestors threatened to stage new demonstrations outside the meeting venue. On Friday several hundred managed to approach to within a few hundred metres before being blocked by anti-riot police.

Inside the talks, British Foreign Secretary Jack Straw was hoping to convince his EU counterparts to back the inclusion of Hamas' non-military linked groups on an EU terrorist blacklist, freezing their funding.

"I think the case against Hamas - its so-called political wing as well as its military wing - is now overwhelming," Straw said Friday.

Britain and the Netherlands have led the call for Hamas' non-military linked groups to be outlawed. But a group including France, Belgium and Greece has opposed the move, claiming it would be counterproductive.

Diplomatic sources said that France had dropped those reservations in particular since a new round of Middle East violence last month.

"It's no longer a problem," said one diplomat, while another said that an agreement on the issue appeared "likely" on Saturday, although Spain still had some "technical issues" concerning exactly who would be blacklisted.

Meanwhile the ministers were also seeking common ground on Iraq, where the battle to rebuild the war-shattered country is once again fuelling tensions between the anti and pro-war camps in the 15-member bloc.

But France and Germany, key EU states who opposed the war in Iraq, have expressed reservations about the latest draft UN resolution on Iraq presented by the United States.

Iran will also be high on the menu. EU foreign policy chief Javier Solana is due to brief the ministers on his recent trip to Tehran, where he warned Iran bluntly that it would be "bad news" for the country if it refuses to sign a treaty allowing snap unconditional UN inspections of its nuclear sites.

Diplomats say concern is high, and all eyes will be on a meeting in Vienna on Monday of the International Atomic Energy Agency (IAEA), the UN's nuclear watchdog which would carry out the snap inspections.

"The stakes are high for Monday's event in Vienna. They know exactly what is expected of them," said one official.

The first day of the EU ministers' talks Friday focussed on the bloc's upcoming inter-governmental talks on agreeing a constitutional treaty, due to start on October 4 in Rome.

The Italian EU presidency notably presented a fast-track timetable for the talks, aimed at completing the unprecedented constitution by December to pave the way for a new Treaty of Rome, recalling the EU's founding 1957 accord.

Reuters adds: Hamas said Friday it had met a Palestinian delegation in Cairo in recent days and was ready to discuss any idea -- including a new truce -- to stop what it called Israeli aggression against Palestinians.

"A delegation from Hamas recently visited Egypt because there was a real Egyptian concern about possible consequences of what is going on now in Palestine, especially since the truce collapsed," a senior member of the Hamas delegation, Osama Hamdan, told Reuters.

Asked whether Hamas was ready to discuss a new truce, Hamdan said: "I can say clearly we are ready to study any idea that will stop the Israeli aggression against the Palestinian people whatever the idea was, whatever it was entitled or wherever it came from."