It didn't take long for Israel to retaliate after the European Union published guidelines which exclude Jewish entities in territories occupied by the Jewish state in the Golan Heights, east Jerusalem and the West Bank from financial cooperation agreements with the bloc. Israeli officials are now freezing contacts with EU representatives in Area C of the West Bank which is under full Israeli control. Meetings with EU representatives have been cancelled, projects and donations frozen, and requests to renew permits granted to EU officials and Palestinians for travel in the West Bank and to Gaza are being rejected. The EU imposed its restrictions last week, citing its frustration over the continued expansion of Jewish settlements in territory captured by Israeli forces in the 1967 Middle East war. The new guidelines render Israeli entities operating there ineligible for EU grants, prizes or loans, beginning next year. A row between the EU and Israel is one thing, but in this clash, the EU has raised concerns that in its retaliation, Israel is blocking the EU from aiding tens of thousands of Palestinians in the West Bank. A number of EU projects, coordinated with Israel, aimed at improving the conditions for Palestinians who live in areas of the West Bank controlled by Israel will be affected. Travel permits will no longer be issued to EU diplomats and officials working in the West Bank, nor for Palestinians employed by the EU, who wish to travel to Israel or cross into Gaza via Israel. Preventing aid from reaching the occupied territories would be a particular blow to some 150,000 Palestinians, many of them poor farmers and shepherds living in Area C. Under the terms of the 1993 interim peace accord, some of Europe's assistance in the West Bank goes to Palestinians whose homes built with EU funding were demolished by Israel. It is of course the US which has given itself the lead role in all Middle East negotiations, but going by recent remarks by prominent American academic Noam Chomsky, the US-brokered resumption of talks is unlikely to amount to much. Europe could, however, change that. If Europe were willing to break from American policies supporting Israel, that could swing momentum toward a breakthrough, Chomsky believes. The EU does have leverage over Israel which is an important trading partner for the 28-nation union. About a third of Israel's exports go to the EU, and an even higher proportion of Israel's imports come from the EU.
For now, the US is running the show, although to ensure that the latest US-sponsored peace drive never bears fruit, Israeli Prime Minister Benjamin Netanyahu has committed to cap settlement building during peace talks to 1,000 homes within existing West Bank settlement blocs. In Israel, this settlement ceiling would be the painful sacrifices Israel likes to talk about so much, the Israeli comedown, the gesture of goodwill by Israel just before the talks start.
Netanyahu denied an American request for another construction moratorium, but agreed to set limits to encourage the Palestinians back to the negotiating table. One thousand illegal homes is the limit? What if the sky were the limit? Whether coincidence or not, the settlement cap came immediately as a slap in the face of the EU whose guidelines were drawn up as criticism of the settlements. The new EU funding guidelines, which could cost Israel billions of euros, take effect in 2014. Following the Israeli cold shoulder, the EU should have no qualms about going through with its plan.
