Prime Minister Benjamin Netanyahu on Monday welcomed the European Union's decision to label Hezbollah's military wing as a terror organization, but criticized the distinction that was made between the armed and political wings of the group.

"Israel sees Hezbollah as a unified organization with no distinction between its wings," Netanyahu said. "I hope the decision will bring about significant steps against the organization."

Netanyahu added that Hezbollah has imposed terror in large parts of Lebanon and turned them into Iranian-backed regions in which thousands of rockets are held at the heart of population centers.

European Union governments agreed on Monday to put the military wing of Lebanese militant group Hezbollah on the EU terror list, diplomats said, in a major reversal of policy driven by concerns over the group's activities in Europe.

"Agreement [was] reached to list Hezbollah," one EU diplomat told Reuters. Three other diplomats confirmed that.

British Foreign Secretary William Hague said earlier that ''the great majority" of the 28 EU member states supported the plans and hoped for the necessary unanimity during Monday's meeting of the bloc's foreign ministers.

Defense Minister Moshe Ya'alon said the apparent European consensus on Hezbollah's terrorist credentials will help prevent future attacks.

"The tightening of the ring around [Hezbollah] will enable increasing intelligence cooperation among countries against Hezbollah."

President Shimon Peres welcomed the decision on his official Twitter page, saying, "I welcome the EU's decision regarding Hezbollah, a significant and necessary step towards putting an end to the spread of terror."

MK Avigdor Lieberman, head of the Knesset Foreign Affairs and Defense Committee, criticized the EU decision as "only going half way" calling the Hezbollah's political and military wing "two sides of the same coin."

"The same person, Sheikh Hassan Nasrallah, stands at the head of both wings" Lieberman said in a statement. "The attempt to make it appear there is an extremist side and a moderate side is like asking whether a cannibal can be a vegetarian."

Justice Minister Tzipi Livni was also pleased with the outcome. "Finally, after years of discussion and debate, the effort to label Hezbollah is a legitimate political party has rightly failed. It is clear to the whole world today that Hezbollah is a terror organization.

German Foreign Minister Guido Westerwelle said that evidence from last year's attack in the Black Sea resort of Burgas in Bulgaria, which killed five Israeli tourists and one Bulgarian, should give enough impetus for the move. Westerwelle said that ''we have to answer this, and the answer is" blacklisting Hezbollah's the military wing.

The attack on EU territory plus a Cyprus criminal court decision in March finding a Hezbollah member guilty of helping to plan attacks on Israelis on the Mediterranean island has galvanized EU diplomacy in moving toward action.

"We should name names because time comes to tell the truth," said Lithuanian Foreign Minister Linas Antanas Linkevicius, who chaired Monday's meeting. ''What was done by the military wing in the region and elsewhere I would say, there should be some reaction."

Hezbollah has denied involvement in the attack on the bus in Bulgaria.

The blacklisting would mean imposing visa bans on individuals and asset freezes on organizations associated with the group. But the implementation would be complicated since officials would have to unravel the links between the different wings within Hezbollah's organizational network and see who could be targeted for belonging to the military wing.

The Iranian-backed group plays a pivotal role in Lebanese politics, dominating the government since 2011, and has since sent its members to bolster Syria's President Bashar Assad forces in their assault of rebel-held areas.

Even though evidence from Bulgaria and Cyprus will be key in the decision, several EU nations also have pointed to Hezbollah's involvement in Syria as a reason for the move.

Hague said that blacklisting Hezbollah's military wing would not "destabilize Lebanon or have serious adverse consequences." "It is important for us to show that we are united and strong in facing terrorism," Hague said.