Palestinian leader Mr Yasser Arafat and Israeli Foreign Minister, Mr Shimon Peres, have been asked to address the European Parliament by President Pat Cox.
Mr Cox today said the "democratic platform" of the Parliament should be used to encourage a return to dialogue.
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"We have been watching with growing disbelief the recent violence and reciprocal atrocities. Military operations have now reached levels unknown in 20 years."
The region, and especially Israel and the Palestinian territories, seems to be edging frighteningly, inexorably, towards an all-out conflagration," Mr Cox told the Parliament.
"We have a responsibility, in this Parliament, in this unfolding tragedy, to prevent the Holy Places being transformed into the killing fields," he added.