The Israeli foreign minister on Monday said the EU envoy, Marc Otte, would be allowed to meet a senior official at his ministry.
But the gesture was not enough to placate the 15-state EU, whose foreign policy chief demanded he be given full access to officials in the region.
Israeli Foreign Minister Silvan Shalom held talks on Monday with his EU counterparts that were described by one diplomat as "full of frank, plain and candid speaking".
Israeli Prime Minister Ariel Sharon and other senior officials have refused to meet Otte since he held talks with Arafat in September. Israel accuses Arafat of fomenting Palestinian violence, a charge he denies.
Israeli Premier Ariel Sharon has
refused to meet the EU official
Although Israel regards Otte as "contaminated", Shalom told Reuters the EU ambassador would no longer be entirely cold-shouldered.
Classing Otte as an "ambassador" rather than a "political figure", Israel has agreed to allow him access to the director-general of its foreign ministry.
But EU foreign policy chief Javier Solana made it clear that this was not enough.
"We can't allow Israel to dictate who ... we can see," said Solana as he sat with Otte on his right and Shalom on his left at a news conference. "I don't see who can be a more political figure than Marc Otte. So we will stick to our position."
A Palestinian was shot dead on Monday by Israeli forces in the northern West Bank town of Tulkarem, Palestinian medical and security sources said.
Yusuf Talib, 22, was hit in the chest and abdomen when Israeli troops who entered the town fired at a group of Palestinians throwing stones in their direction, according to the sources.
Four Palestinians were shot and wounded in two further clashes with Israeli soldiers in the West Bank late on Monday, medical sources said.
Two were wounded, one of them seriously, when Israeli troops opened fire on a group of stone throwers in the Burka region, near Nablus.
The other two were shot near Jenin, reportedly for breaking a curfew imposed last week.