BRUSSELS, March 25: Still shocked by the Madrid train bombings believed to be the work of Al-Qaeda-linked Muslim extremists, European Union leaders agreed on Thursday to a raft of anti-terror measures , including the appointment of a first "security czar" with responsibility for coordinating EU counter-terror policies and actions.

"Terrorism is the single most important threat to the free world and it's the biggest threat since the Second World War," European Commission President Romano Prodi told reporters ahead of the summit.

Many EU policymakers recognize that despite plans to step up security, European countries are vulnerable to other terror attacks. As such many are pressing for tougher action to tackle the root causes of terrorism, including Arab-Israeli violence and on-going strife in Iraq.

EU governments also want to focus on implementing existing anti-terror legislation instead of creating new structures such as a European CIA. A number of measures agreed after the Sept 11, 2001, attacks on the US landmarks have still not been put into force in all EU states.

Leaders will encourage governments to share sensitive security information and improve coordination among their secret services, police forces and judicial agencies.

EU governments will sign a declaration of solidarity pledging automatic assistance - including military aid - to any member state attacked by terrorists.

They will also warn developing nations that aid and trade benefits with the EU could be lost if they do not cooperate in the war on terrorism. Leaders will strive to revive stalled talks aimed at a new constitution prior to the bloc's expansion to 25 members on May 1.

Hopes that a constitutional deal could be struck by end-June have risen following statements by Spain's incoming prime minister Jose Luis Rodriguez Zapatero, that he will drop Madrid's hardline stance which helped torpedo a treaty last December.

Poland, which along with Spain opposed a Franco-German demand for rewriting an EU power-sharing formula, is also showing signs of compromise. Irish Prime Minister Bertie Ahern, whose country holds the rotating EU presidency, has told leaders he believes there is now a "a strong shared sense" that talks can be wrapped up soon.

On Friday, summit leaders turn to reform targets set in 2000 at a Lisbon summit aimed at making the EU economy the most competitive in the world by 2010. Lisbon goals include liberalising information technology (IT), boosting the service sector and labour market reform.

The March 25 to 26 Brussels summit marks the end of an era for the EU of 15 member states - all of which are prosperous and western European. Ten new states, many from the former East Bloc and much poorer than their western counterparts, will be admitted to the EU on May 1 in a big bang enlargement.