COPENHAGEN, March 18, 2007 (WAFA) - Sweden and Denmark welcomed Sunday the formation of the National unity government.

Swedish Foreign Minister Carl Bildt told Swedish radio that Sweden would "carefully review" the members and policies adopted by the new unity government.

"Within the EU group we will carefully assess this, but there is no doubt that this represents a breakthrough to something that can be positive," Bildt said.

Danish Foreign Minister Per Stig Moller said "we can concede that there has been progress. But we have to state that it has not been big enough," Moller was quoted as telling Danish news agency Ritzau.

Denmark was ready to have contacts with Palestinian cabinet members that were not linked to Hamas, Moller added.

Like Bildt, Moller said the formation of a unity government was positive since it averted a potential bloodbath between Hamas and Fatah.

A.D (22.45P) (20.45GMT)