Palestinian news agency claims Abbas received letter from President Christofias saying his country hopes for 'peaceful solution ensuring independent Palestinian state with east Jerusalem as its capital.' Cyprus: Our position hasn't changed since 1988, it coincides with EU's stance

Cyprus has recognized a Palestinian state within the 1967 borders, Ramallah-based news agency WAFA reported Sunday.

According to the report, President Dimitris Christofias sent his Palestinian counterpart Mahmoud Abbas a letter saying Cyprus recognizes a Palestinian state. In the letter, WAFA reported, Christofias ensured "historic deep relations between the two countries" and said he hoped the region would witness a "peaceful solution ensuring an independent Palestinian state with east Jerusalem as its capital."

The Israeli Foreign Ministry is checking the report, but for now it believes it is false.

"We have no knowledge of any decision by Cyprus that is not in line with the European Union's position, which calls on the sides to solve the conflict through direct and indirect negotiations while avoiding unilateral measures," Foreign Ministry official Yossi Levy said.

According to the Palestinian report, Christofias stressed that his government would not recognize any unilateral steps - including in Jerusalem – and said "settlements in the occupied territories constitute a serious obstacle to a comprehensive peace agreement in the Middle East."

Later Sunday, Cyprus' government released an official statement saying President Christofias "replied to a letter sent by Palestinian President Abu Mazen regarding Cyprus' decision from 1988 regarding recognition of a Palestinian state and determined that it still holds. As for the borders of a future Palestinian state – the position of Cyprus' government coincides with that of the EU – it will not recognize any (border) changes unless both sides agree to them."

On Friday Paraguay recognized a "free and independent" Palestinian state within its 1967 borders.

The South American nation joined a wave of other regional countries that include Brazil, Argentina, Bolivia, Chile, Ecuador, Peru, Guyana and Uruguay.

"The Republic of Paraguay expressly reiterates the recognition of this state as free and independent with the borders of June 4, 1967," the foreign ministry said in a statement.

Ronen Medzini, Elior Levy and AFP contributed to the report