EU foreign policy chief Josep Borrell said on Monday that the bloc was ready for a "fresh start" with Israel as Foreign Minister Yair Lapid visited Brussels.
But Mr Borrell urged progress on peace efforts with the Palestinians.
"We expect Israel to offer a political perspective to end the conflict," he said after Mr Lapid held talks with the EU's 27 foreign ministers.
"A credible engagement and stronger relationship with Israel needs to revive a path towards peace and justice for Israel and Palestinians alike."
Mr Borrell earlier said Monday's meeting represented an opportunity for a new beginning after tension between the bloc and Israel under former right-wing leader Benjamin Netanyahu.
Centrist Mr Lapid helped to form a disparate coalition that came together last month to remove Mr Netanyahu after 12 years in charge.
Mr Lapid said the two sides had started "a new page, especially on the economic front".
"There are opportunities worth billions of euros for Israel that have opened up today and that we will develop in the future," he said.
Mr Lapid said he discussed how the EU could be helpful in reviving the peace process with the Palestinians, but insisted that "people understand that we can't do it right away".
"There are all sorts of problems within the Palestinian Authority," he said. "People understand that Hamas is just a terrible terror organisation and they're not to be negotiated with."
Both sides said they were aiming to resume meetings of the EU-Israel Association Council, last held almost a decade ago, to improve ties between the two sides.
But Mr Borrell said some EU members states remained opposed to the move and that no date had been set to restart the talks.
Relations were tense between Brussels and Mr Netanyahu, who pushed to sideline the EU in the volatile region.
Other thorny issues remain as the EU pushes to resume the search for a two-state solution to the conflict between Israel and the Palestinians, and seeks to broker the return of the US to the 2015 nuclear accord with Iran.
