The leaders of the European Union (EU) and of its southern neighbours agreed on Sunday to a joint declaration accompanying the creation of a Union for the Mediterranean.
The breakthrough came after heads of state and government from 43 countries, among them Israel, Syria and the Palestinian territories, overcame their differences over a reference to the Middle East peace process.
Unlike its draft version, the final declaration approved in Paris made explicit references to the Annapolis peace conference and to a meeting of EU and Mediterranean foreign ministers in Lisbon last year.
The leaders further "recall that peace in the Middle East requires a comprehensive solution and in this regard welcome the announcement that Syria and Israel have initiated indirect peace talks under the auspices of Turkey".
The paragraph had emerged as one of the main sticking points of the declaration.
Israeli Prime Minister Ehud Olmert, Syrian President Bashar al-Assad and the president of the Palestinian Authority, Mahmoud Abbas, were among the leaders attending the summit, which was held in the glass-roofed halls of Paris' Grand Palais, by the Champs Elysees.
Sarkozy had earlier opened the founding summit meeting of the Union for the Mediterranean with an appeal for peace.
"The nations along the Mediterranean, and those who are not, share a common interest: that peace and stability reign on the Mediterranean," Sarkozy told heads of state and government from the EU and from countries along the Mediterranean Basin.
"The success and failure of everything we undertake with each other will depend first and foremost on the ability of each and every one of us to truly share," Sarkozy said.
"This means building increasingly close solidarity, with respect for one another."
Egyptian President Hosni Mubarak, who will co-chair the union with Sarkozy during its initial phase, said the EU should help to promote growth in the Mediterranean or face a massive influx of immigrants in the future.
"What will be the situation in the Mediterranean, in particular on the southern shores, in 2030 or 2050? And what consequences will that have on our partners on the northern shores?" he said, noting that the area's population was projected to grow from the current 272 million to 332 million in 2020.
The draft joint declaration being discussed in Paris contained sensitive passages on the need to prevent religion from being associated with terrorism, and calls for a nuclear-free Middle East.
Israel is the only Middle Eastern country which is widely believed to have a nuclear arsenal.
Tough negotiations also took place on the exact scope and power structure of the union, which Sarkozy devised as a means of revamping the EU's 13-year-old southern neighbourhood policy, which is known as the Barcelona Process.
The EU's executive, the European Commission, says it has already spent some 8 billion euros ($12.7 billion) on Barcelona between 1995 and 2007, and plans to invest a further 9 billion euros over the next six years.
But officials in Brussels concede that it has failed to deliver.
The new union hopes to attract private investors by focusing on concrete projects.
Among them are plans for "motorways of the sea," a belt of solar power plants, a programme to help cope with natural disasters, and the creation of an agency to promote medium-sized businesses.
It also gives the south a stronger voice through a co-chairmanship. Its first presidents are France, as the current holder of the EU's rotating presidency, and Egypt.
Ahead of the launch in Paris, Sarkozy held joint talks with Olmert and Abbas, who spoke of their hopes of moving closer to peace.
"We have never been so close to an agreement than today," Olmert said of the Middle East peace process.
Sarkozy said the fact that old foes were sitting together around the same table was an "historic" event.
"We are learning to like, rather than hate, each other," the president had said ahead of the launch.