Spain is drawing up new proposals for lifting Israel's blockade of the Gaza Strip as the EU scrambles to forge an effective policy following international outrage over the killing of nine pro-Palestinian Turkish activists in a "freedom flotilla".

Miguel Moratinos, the Spanish foreign minister, is to present Madrid's ideas to EU colleagues next Monday amid signs of disagreement between member states and demands for tougher action.

The US, Britain and the EU have all called the blockade "unsustainable". But Britain is warning of exaggerated expectations of what can be achieved. "I don't think the British government is talking about lifting the blockade," said the Foreign Office minister for the Middle East, Alistair Burt. "Everything is done with relatively small incremental steps. Almost any change is potentially a change for the better."

British officials stress the importance of Israel improving access conditions for 1.5m Palestinians by publishing a blacklist of banned goods and not simply stating which ones are permitted. "That would be a fundamental shift which would enormously benefit Gaza," said one.

Israel has rejected a French idea that EU forces would check the cargoes of ships heading for Gaza to ensure they are not carrying goods Israel would consider a security risk. Bernard Kouchner, France's foreign minister, called the response from Jerusalem "rather negative". Spain, chairing the EU's rotating presidency, will be expected to work with Lady Ashton, the union's foreign policy chief, diplomats said. Another idea is the revival of the EU Border Assistance Mission at the Rafah crossing point into Egypt. Its operations were suspended in 2007 after the takeover of Gaza by the Islamist movement Hamas, shunned by Israel and the west.

"We are seeing a sense of disarray with several voices speaking at the same time," said Clara O'Donnell of the Centre for European Reform. "But even if the EU is keen to help, the Israelis do not consider it reliable enough. There is not much Europe can do until the Americans move."

But Lord Patten, Britain's former EU external affairs commissioner, today urges the EU to demand an immediate end to the blockade, open dialogue with Hamas, and not let the US monopolise policy.

"Today's miserable and brutal stand-off in the Middle East requires new political initiatives," he writes in the Guardian. "The EU is Israel's biggest trade partner and the largest provider of development assistance to Palestine yet it has been content to play a largely very quiet third fiddle to the US. It is true that the US has the primary external role in the region, and that any peace settlement will require Israel's willing agreement. But none of this justifies the EU's present nervous self-effacement. This policy gives Israel carte blanche. It makes Europe complicit in outrageous and illegal acts." Patten calls for the UN to be tasked with preventing weapons entering Gaza while the EU should take the initiative with Turkey and the Arab League to re-establish a national unity government of Fatah and Hamas for the West Bank and Gaza. Britain says it has no plans to end its ban, backed by the Quartet, on contact with Hamas.