Foreign Minister Shimon Peres held discreet talks in Budapest on Sunday with Premier Karoly Grosz and Foreign Minister Peter Varkonyi of Hungary, according to reports here.
Peres did not meet with Hungarian strongman Janos Kadar, the Communist Party secretary general. The talks were described by the Hungarian government as informal.
Nevertheless, political observers here attach importance to the visit, the first on this level in two decades. They predict a further improvement in political and economic ties, as well as tourism, between the two countries.
Diplomatic sources in Western Europe describe the Peres visit as a major breakthrough and believe that several Communist bloc countries, notably Poland and Hungary, may re-establish diplomatic ties with Israel in the near future. Official Israeli sources say Peres would not have been invited to Budapest without approval from Moscow.
Hungary and Israel each have interest sections in the other country, agreed upon last year in a first step toward thawing a 20-year freeze in diplomatic relations.
Some 30,000 Israeli tourists visited Hungary last year, and several thousand Hungarians came here, most of them members of Hungary’s 80,000-strong Jewish community.
From Budapest, Peres flew to Milan, where he met Monday with Italian Foreign Minister Giulio Andreotti to discuss the Mideast situation and particularly an Italian proposal to put the West Bank and Gaza under European Community stewardship, pending a political settlement.
Peres was due to arrive Monday night in Madrid to attend a meeting of the Socialist International.
Correspondents Edwin Eytan in Paris and Ruth E. Gruber in Rome contributed to this report.)
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