Israeli Foreign Minister Mr Silvan Shalom told a visiting European Union delegation today that his country was considering applying for membership of the bloc.
"Shalom said he is not excluding that this government will ask for full membership in the EU," said Mr Marco Pannella, an Italian member of the European Parliament and president of the Transnational Radical Party.
A spokesman for Mr Shalom confirmed the comments but said: "It doesn't mean he is preparing the dossier for applying tomorrow."
"In principle, the minister thinks a possibility exists for Israel to join the EU since Israel and Europe share similar economies and democratic values," he said.
Mr Pannella, who is spearheading the initiative, said support was growing in the European Parliament for Israel to join the EU but that it could take up to a decade to complete the process.
There is, however, little enthusiasm among EU member states for Israel to join. The EU is frustrated by Israel's reservations about a peace plan known as the "road map" drawn up by the EU, the United States, the United Nations and Russia.
It has also expressed concern at Israel's treatment of Palestinians and its military measures intended to quell a Palestinian uprising against Israeli occupation.