The six-nation Gulf Cooperation Council welcomed on Saturday EU plans to ban its 28 members from dealing with Jewish settlements, hoping the move would push forward peace efforts.
The guidelines, published in the EU's Official Journal Friday, forbid EU member states from funding or dealing with entities in territories occupied by the Jewish state in 1967.
Officials have warned of a serious crisis between the European Union and Israel over the move.
The GCC states "welcome the European Union's decision which they hope will back international efforts to revive peace talks between Palestinians and Israel, and press Israel to end its occupation of Palestinian territories," said their chief Abdullatif al-Zayani.
Zayani described the decision as "wise and reflects the EU's solid stance in rejecting Israel's settlement policy and its confiscating of Palestinian territories in a clear violation of all agreements, international law, and UN resolutions."
Settlement building in the territories occupied by Israel in the 1967 Six Day War is considered illegal under international law and has been the main point of contention between Israel and the Palestinians.
On Friday US Secretary of State John Kerry announced israeli and Palestinian negotiators have agreed to establish the basis for resuming direct peace talks that have been frozen for three years.
The GCC countries are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates