Prague  - The new Israeli government is prepared to respect a two-state solution in its conflict with the Palestinians, former Czech president Vaclav Havel was reported saying Tuesday after meeting with Israeli President Shimon Peres.

Havel said Peres provided the assurances after Havel expressed concerns that the new Israeli government will not support the establishment of a Palestinian state because the new Israeli government's coalition includes parties which have rejected compromises toward the Palestinians.

"Although it likely won't be declared directly in any way, the government will honour the idea of two states," the Czech news agency CTK cited Havel as saying after meeting Peres in Prague.

Israeli prime minister-designate Benjamin Netanyahu is considered a hawk who is opposed to making concessions on key issues of the Israeli-Paletinian conflict, most notably on Jerusalem. He has nevertheless pledged to continue peace talks with the Palestinians.

Heading a coalition including right-wing factions, he has thus far refrained from openly endorsing a two-state solution to the conflict, despite calls by moderate Palestinian officials to do so.

Avigdor Lieberman of the ultra-nationalist Israel Beiteinu party is set to become the foreign minister in Netanyahu's cabinet. Israel's parliament, the Knesset, is set to swear the cabinet in later on Tuesday.

Other hardline coalition partners are the ultra-Orthodox Shas and the pro-settler Jewish Home.

The European Union has warned that a departure from the peace- process track, which was agreed on at the 2007 Annapolis peace conference, would strain the bloc's relations with Israel.

"Relations would become more difficult indeed," acting Czech Foreign Minister Karel Schwarzenberg said Friday during an informal meeting of the EU's foreign ministers.

He added the ministers would have to discuss at one of their upcoming meetings "what consequences the EU would draw."

Havel met Peres during his two-day visit of Prague ending Tuesday. The Czech Republic holds the EU's rotating presidency until June 30. dpa