Israel and the European Union are holding quiet talks in the hope of resolving the crisis that resulted from the EU's decision to label products made in Judea and Samaria . According to Haaretz , the EU’s deputy Secretary General for the External Action Service, Helga Schmid, came to Israel with her team on a secret visit last week to discuss a solution to the problem. Schmid, who is a senior adviser to EU Foreign Affairs Chief Federica Mogherini, met with Foreign Ministry Director General Dore Gold, representatives of the National Security Council and officials from other ministries. The talks are also reportedly aimed at restarting talks with the EU on the Palestinian issue, which were halted by Israel three months ago. Officials in Jerusalem said Israel and the EU are "working toward reaching understandings that would include mutual steps to bring the relationship back on track." The report cited an unnamed official in Jerusalem who said Israel told Schmid that in order for the Jewish state to agree to renew talks on the Palestinian matter, the EU most adopt "a more respectful, balanced approach to Israel." Prime Minister Binyamin Netanyahu and Mogherini met three weeks ago on the sidelines of the World Economic Forum in Davos, and Shmid's visit is reportedly a product of that conversation. Israel has halted all contacts with EU working groups and has begun demolishing illegal EU construction in Area C of Judea and Samaria. The EU apparently has found this hard to bear. On Saturday, the EU called on Israel to halt the demolition of illegal Arab buildings, some of which are EU-funded. "In the past weeks there have been a number of developments in Area C of the West Bank, which risk undermining the viability of a future Palestinian state and driving the parties yet further apart," the EU diplomatic service said in a statement. It referred to Israel's decision on January 25 to declare 154 hectares (380 acres) of land near Jericho in Judea as state land, with reported plans to build around 150 new residences. This was followed by the demolition of several illegal, EU-funded structures in the south Hevron hills. "The EU is very unhappy that we froze everything having to do with the peace process vis-à-vis them," an official told Haaretz . "They understand that they have to give us something, in a statement, action or a more positive approach.”