The largest single donor of aid to the Palestinians - the European Union - is reviewing whether it can continue to justify giving such sums when it is seeing so little benefit from the money on the ground. The EU's External Affairs Commissioner with responsibility for the Middle East, Manuel Marin, has said the Commission still recommends maintaining the aid programme, but in return he demanded a proper role in the Middle East peace process. From Brussels, Jonathan Chapman reports:

The European Union has given more than one-and-a-half-billion dollars to the Palestinians over the last five years. The EU gives more to the Palestinians per head than to anyone else.

But the agreement runs out at the end of this year, and unless there is political agreement among EU countries to renew it, there is no budget for next year.

Mr Marin is convinced that EU aid has kept the peace process alive at times of crisis, but he said the economic circumstances for the Palestinians had deteriorated during that time.

During the intifada or Palestinian uprising, he said, unemployment among the Palestinians was 20%. Now, in spite of all this monetary help, it was over 40%.

He said it was going to be hard to argue for a continuation of the aid programme, but the Commission was united in proposing it should be renewed.

However, he said, it was time for the EU to play a more conspicuous role in the peace process - something both the Americans and the Israelis have resisted.

Using a commercial analogy, he said that the largest shareholder of a company should always have a place on the board.

Mr Marin was clear that the United States should continue to take the lead, but he said that if the EU was to continue being the largest aid donor, it ought to have a place at the peace talks.

His statement comes at a time when the European Union, under the British presidency, is trying hard to boost its profile in international diplomacy.

Next week, Mr Marin will accompany an EU troika of junior ministers to Algeria in an endeavour to help stem the violence.