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ROME — Pope John Paul II has expressed concern that Israeli policy could "seriously harm" the Middle East peace process.

Israeli authorities, he said during his weekly Sunday address from his window overlooking St. Peter's Square, "have made grave decisions which have attracted the worried attention of the international community."

These "could seriously harm the peace process and the spirit of trust so necessary for its continuation."

The pope did not mention any specific Israeli policy decisions, but he appeared to be referring to the recent Israeli announcement that a new Jewish neighborhood would be built at Har Homa in southeastern Jerusalem.

Last week, during a private audience with a group of 26 American Christians and Jews who were visiting the Vatican to further interreligious dialogue, the pope reiterated his often-expressed hope to visit Jerusalem.

The group was led by Rabbi Richard Yellin, who now lives in Netanya, Israel. Until he made aliyah five years ago, he was the rabbi of congregation Mishkan Tefillah in Newton, Mass.

"During our audience, we asked God's blessing on the Pope," Yellin said in an interview.

"I put my hands on his head and we said a prayer as he anticipates his trip to Jerusalem," he said. "The pope said he hoped to see me there."

Yellin, a consultant on Israel-diaspora relations, said the members of his group included businesspeople and philanthropists from the Boston area and elsewhere who were acquaintances of Harvey Krentzman, a Boston management consultant and past president of Mishkan Tefillah.

During a three-day visit, the group, which included Catholics, Protestants and Jews, met with senior Vatican officials involved in Catholic-Jewish dialogue.

The group made a donation to the Vatican Commission for Relations with the Jews to support Catholic-Jewish dialogue, and a matching donation to an Israeli foundation based in Netanya.

In another development, the Vatican announced it would establish full diplomatic ties with Libya.

The Holy See and Libya, "have decided by common agreement to stabilize their diplomatic relations,"the Vatican said.