Store asked Lieberman about the Knesset decision to set up a parliamentary inquiry into left wing NGOs, with Lieberman replying that the aim was for greater transparency regarding where the money was originating. He told Store it was absurd that Saudi Arabia, not exactly a beacon on human rights, would be funding human rights organizations in Israel.

Lieberman, according to his office, told Store that in a democratic country it was important for NGOs to operate and that they should be encouraged. But he said it was also the right of democracies to protect themselves, and not let radical groups use the cover of charity work to spread hatred and terror. Spanish ambassador Alvar Iranzo, whose country is another major contributor to the NGOs, told the Post that while he understood that on one hand this was naturally a domestic issue subject to internal legislation, the policy of the EU and most member states was to subsidize civil society in Israel, the PA and other countries promoting the values of peace in the region.

Iranzo said that the EU would "not be too happy" if Israel made "things more difficult." Another senior EU diplomatic official said the issue would likely be raised in Brussels next month at the annual EU-Israel Association meeting.

Store is currently in the country as part of a regional trip that is also taking him to Jordan, the Palestinian Authority and Syria. In addition to meeting Lieberman on Tuesday evening, he met Wednesday with Prime Minster Binyamin Netanyahu, Defense Minister Ehud Barak, and Opposition head Tzip Livni.

Lieberman, meanwhile, travelled on Wednesday to Greece, another sign of the blossoming ties between Greece and Israel. He met with his Greek counterpart Dimitris Droutsas, who was here in October, and will meet during his three day visit with Prime Minister George Papandreou, Defense Minister Evangelos Venizelos and Minister of State for Investment Haris Pamboukis.

On the eve of this visit, Papandreou phoned Netanyahu and – according to Netanyahu's office – the two agreed to set up a governmental advisory body that they will head to coordinate closer cooperation between the two countries. The first meeting of this body is scheduled in the coming months.

In other diplomatic developments, National Security Advisor Uzi Arad met in Moscow Wednesday with his Russian counterpart, General Nikolai Patrushev. A statement form the PMO said that the meeting reflected the close contacts between the two countries, and had added significance in light of the work sanctions at the Foreign Ministry in Jerusalem that led to the cancellation of Russian President Dmitry Medvedev's visit here next week.