The European Union urged both Israel and the Palestinians to "step back from the brink" and allow diplomacy to resolve the crisis caused by the abduction of an Israeli soldier by militants in the Gaza Strip.
"All sides need to consider their responsibilities extremely carefully," EU External Relations Commissioner Benita Ferrero-Waldner said in a statement today, after Israeli troops and armour thrust into the Gaza Strip, shelling targets and bombing power stations and a bridge.
"Both sides need to step back from the brink before this becomes a crisis that neither side can control," Ms Ferrero-Waldner warned.
Palestinian President Mahmoud Abbas accused Israel of carrying out "crimes against humanity" with its incursion into Gaza, from which Israel had pulled out its forces last year after 38 years of occupation.
The EU statement demanded that the Palestinian militants immediately release 19-year-old Cpl Gilad Shalit, saying that keeping him would only make things worse for the Palestinian people.
"It is unacceptable to seek political goals by such means," Ms Ferrero-Waldner said. She also urged Israel to "act with prudence."
"Diplomatic efforts to free the soldier must be allowed to work," the statement said.
Mr Ferrero-Waldner expressed concern about the Israeli shelling that had disrupted electricity supplies in much of Gaza, saying vital services such as hospitals also had been affected.
"Everything must be done to prevent the humanitarian situation from worsening," she said.
Austria, while holds the rotating EU presidency, called for the soldier's "immediate and unconditional release."
It urged the Palestinian leadership to undertake all necessary efforts in this regard and called on all parties to show restraint and to avoid further escalation.
Israeli Prime Minister Ehud Olmert said today that Israel would not balk at "extreme action" to bring the soldier home.
In Paris, France's Foreign Minister denounced the use of force by both sides saying the crisis could only be solved through a political dialogue, while the German government asked both sides to "exercise restraint and avoid any further escalation".