The first South American-Arab summit gave support for the Palestinians in their fight for an independent state and called for dismantling all Jewish Settlements and the Wall built in the West Bank, Palestinian sources reported on Wednesday.

Brazilian President Luiz Inacio Lula da Silva, remarked that both Arab and South American countries must work together to help each other defy problems, of occupation in the middle east and poverty in Latin America.

‘It’s a declaration that points out the path we must follow if the relation between South America and Arab countries is to be changed forever,’ said Lula da Silva who has led the gathering of 34 nations representing more than 600 million people.

The summit’s original intent of focusing on growing trade and investment between the regions was almost forgotten as other issues were highlighted.  The Arab nations pushed Middle East politics, specifically the occupation of Palestine to the forefront.

Arab leaders said political cooperation was necessary before any future trade pacts.

‘How can you have trade and development when you have countries under occupation,’ said Kuwaiti Foreign Minister Mohammed Sabah Al-Salem Al-Sabah.

This was not very pleasing to some other leaders.

‘The idea of this meeting was to explore possibilities for trade and investment, not deal with political issues,’ Peruvian President Alejandro Toledo said. ‘The importance of this gathering is not what has been said, but the fact that we have finally got together.’

The rallying point of the final declaration was a demand for the creation of a Palestinian state which it said would coexist peacefully alongside Israel.

Israel should withdraw from all territories occupied since the 1967 Arab-Israeli War and dismantle settlements, including those in East Jerusalem, it said. The fate of settlements has been one sticking point an internationally-backed peace plan [Road Map] that the Israelis and Palestinians have agreed to pursue.

The declaration backed the right of states and peoples to resist foreign occupation — a clause that drew concern from Israel on the grounds that it could tacitly endorse militant anti-Israel groups like Hezbollah and Hamas.

The declaration also condemned terrorism but called for a UN-led conference to define what terrorism was.

However, Israeli officials were not happy with such declaration.

‘It will encourage extremists, terrorist groups, its giving them a green light to resist,’ Israel’s ambassador to Brazil, Tzipora Rimon, said.

On the other hand, U.S. officials did not find the declaration disturbing.

‘There’s no need to interpret the declaration as giving support to terrorism or any group that supports terrorists,’ a State Department official, who asked not to be named, said.