Palestinian President Mahmoud Abbas hailed the EU's decision of labelling Israeli settlement products.
Abbas on Saturday said the European position stressed the need for Israel to differentiate between Israeli products and settlement products, reported Xinhua news agency.
The president said the decision signals a shift in the European stance, "Europe discovered that there is a need to bring justice to people, so it focuses on the two-state solution saying that settlements and their products are illegal."
The European parliament adopted a non-binding resolution on labelling the products of Jewish settlements in the West Bank, including East Jerusalem and the Golan Height.
"We are walking on the right path in all walks of life," Abbas said after praising a decision by the UN general assembly on Thursday to raise the Palestinian flag at UN headquarters.
He said this vote means Europe has taken two important decisions regarding the Palestinian cause.
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"We do not want to exaggerate and promote illusions to people that the state will be achieved within seconds, but we are on the right track," said Abbas.
Thursday's vote was adopted by 119 countries and objected by eight, including the US.
"The 45-abstaining countries are considered supporters as they did not object," Abbas said.
The resolution allows the flags of non-member observer status, Palestine and the Holy See, to be hoisted alongside those of member states.