In a carefully worded joint declaration agreed after more than three hours of haggling at this rare August crisis meeting of the 25-member block, foreign ministers said a "sustainable ceasefire" should follow the cessation of hostilities, without elaborating on the difference between the two.

The failure came after Britain and Germany, backed by The Netherlands, rejected a draft compromise by the EU's Finnish presidency calling for an "immediate ceasefire" between Israel and Hezbelloh, according to diplomats.

"The Council (of EU ministers) calls for an immediate cessation of hostilities to be followed by a sustainable ceasefire," said Finnish Foreign Minister Erkki Tuomioja, whose country holds the EU's rotating presidency.

He was speaking to reporters after ministers wrangled for three and a half hours over the exact wording of the joint EU declaration, and as Israel escalated attacks on Hezbollah guerillas and vowed to step up ground operations.

"It's important to get the words and concepts right," he said, adding: "There are no divisions in the European Union."

German Foreign Minister Frank-Walter Steinmeier said the agreement did not mean an immediate ceasefire, since cessation of hostilities was not the same as a ceasefire.

"A ceasefire can perhaps be achieved later," he said. "We can now only ask the UN Security Council and put pressure on it and not to waste any more time."

Division

Despite Tuomioja's statement, the EU talks did come amid sharp disagreement within the bloc about whether to call for an immediate ceasefire.

France has led calls for an immediate ceasefire, but Britain and Germany have pushed for a UN accord to deploy an international force to secure the Israeli-Lebanon border and ensure that any truce is sustainable.

French Foreign Ministe Philippe Douste-Blazy welcomed the EU agreement, saying the bloc had spoken with "one voice."

"It is an important step. The European Union is supporting the resolution proposed by France to the UN Security Council," he said, denying any difference of opinion between Paris and Berlin.

The Finnish minister meanwhile underlined the need for urgent action at the UN Security Council to provide the framework for a sustainable ceasefire, notably agreement on an international stabilization force.

"Once such a framework has been established -- and we are hopefully talking more about days rather than weeks -- EU member states have indicated their readiness to contribute to such an operation," he said.

No to terror list

The Finnish EU president also said the bloc does not intend on adding Hezbollah to its list of terrorist organizations at the present time.

"Given the sensitive situation, I don't think this is something we will be acting on now, Tuomioja told the news conference after the meeting.

His remarks were in response to a letter signed by 213 members of the United States Congress, which was sent to EU foreign policy chief Javier Solana. It asked that the EU add Hezbollah to its terrorist list.