The European Union must shake off US dominance and take a bolder approach in pressing for a settlement of the Israel-Palestinian conflict, the former EU commissioner Chris Patten said today on a visit to Gaza.

Israel's policy of blockading Gaza had been a "terrible failure – immoral, illegal and ineffective", he said, which had "deliberately triggered an economic and social crisis which has many humanitarian consequences".

In an interview with the Guardian, the former Conservative cabinet minister suggested it was time to reassess the isolation of Hamas, saying that approach had failed to weaken it.

Patten's visit, his first since 2002, coincided with a lightning second trip by the EU foreign policy chief, Lady Ashton, who called on Israel to open Gaza's borders rather than merely allow in more consumer goods.

Ashton's second visit since her appointment last December "showed a preparedness to be more independent-minded," said Patten. "The default European position should not be to wait to find out what the Americans are going to do, and if the Americans don't do anything to wring our hands. We should be prepared to be more explicit in setting out Europe's objectives and doing more to try to implement them."

He implicitly criticised US dominance of the Middle East quartet – the US, EU, UN and Russia – by saying he concurred with the description of it by the leader of the Arab League as the "quartet sans trois".

Patten, who found it "easier to get into a maximum security prison in the UK than to enter Gaza", said Israel's relaxation of its blockade had not gone far enough. "It's moved from about minus 10 to about minus eight. It doesn't do anything to help restore economic activity in Gaza.

"It's difficult to understand what preventing exports has to do with security. It has everything to do with the view that Gaza should be collectively punished to discredit Hamas. Unfortunately there are some centuries, if not millennia, of history that show that does not work. Presumably the international community as well as Israel wants at some stage – sooner rather than later – to be able to persuade Gaza and its political leadership to take a course which will lead to reconciliation and peace and stability. It's difficult to know how you accomplish that if you deny the people of Gaza any social or economic progress."

On earlier visits, he said, he had observed "a community that was poor, but at least economic activity was taking place". Since the blockade, "economic and commercial life has been squeezed out of Gaza in what looks and feels and is like a medieval siege".

Israel's change in policy was not a "fundamental shift in its position but it has plainly deflated some of the criticism" following the lethal assault on the aid flotilla on 31 May. That, he added, was "a terrible own goal" for Israel.

On negotiations with Hamas, Patten referred to his involvement with the Northern Ireland peace process, which "would not have been successfully concluded if we hadn't – with considerable American encouragement – agreed to talk to Sinn Fein/IRA.

"You don't always agree with people you talk to – indeed sometimes you find them despicable – but you need to ease them out of the corners into which they've painted themselves rather than lay on the paint much thicker.

"I think it's wholly reasonable to say we couldn't deal with Hamas unless they agreed to a comprehensive and complete ceasefire. But do we need to insist on them accepting all past agreements? Has Israel accepted all past agreements? If you simply isolate them, do you weaken them?" In fact, he said, "you strengthen people who are even more extreme than they are".

Before crossing to Gaza with the charity Medical Aid for Palestinians, of which he is president, Patten visited the West Bank and was shocked by the "huge new settlements".

"We're told there is an 'unprecedented freeze', but I saw large numbers of houses and flats being built as we speak. One of the key elements of a final agreement [between Israel and the Palestinians] will be how you cope with settlements. The more difficult it is to secure a viable and contiguous Palestinian state, the more difficult a final agreement will be."

If two states were no longer possible, then there would have to be one state on the land, he said. "But can you have that and retain a Jewish state which is democratic? I haven't heard anyone argue that convincingly."

He said public opinion in Europe and Britain was moving in favour of a change in Israeli policy towards Palestinians, but that could be endangered by growing demands for a boycott of Israel.

"I don't think a boycott would help," he said. "It could have the reverse consequences to those intended."