"Israel has the right to protect its citizens from terrorist attacks but the exercise of this right should take place within the boundaries of international law," Dutch Foreign Minister Bernard Bot said in a statement in Amsterdam on Friday.
Bot condemned a rocket attack by Palestinian resistance group Hamas that killed two Israeli children in the border town of Sderot on Wednesday and called on the Palestinian Authority to clamp down on those behind such actions.
But he also called Israel's subsequent military retaliation in Gaza "disproportionate", noting it had also led to the deaths of civilians, including children, and left many injured.
Bot's statement came as Israeli Apache helicopters were reported to have struck a refrigerator factory in Gaza City.
"Bot urged Israel and the Palestinians to consider the longer-term consequences of their actions, which merely inflame the situation and give rejectionist forces a pretext to derail the quest for a peaceful settlement," the Dutch statement said.
Israeli violence has also killed
civilians, said Bot
EU member Spain also expressed concern at the escalating violence in the Gaza Strip after the upsurge in the number of civilian deaths.
"The Spanish government wishes to express its deep concern over the recent events in Gaza which have had their consequence such loss of life," a foreign ministry statement said.
The EU is a sponsor of the road map initiative for Middle East peace.
The US took a more detached line and expressed its concern for the Middle East initiative when it called on Israel to use only "proportional force" in its ongoing military operations in Gaza. It also urged Israel to avoid civilian casualties.
The growing violence in the northern Gaza Strip could complicate peace efforts, the US said.
The latest violence raised to over 4400 the number of people killed since the start of the intifada four years ago. Over three times more Palestinians than Israelis have been killed.