BRUSSELS — At least half the member states of the European Union, including France and the UK, currently support labeling products manufactured in Israeli settlements, a European official said on Tuesday.

In parallel, European diplomats have been mulling the possibility of ending EU funding for the Palestinian Authority should negotiations between Israel and the PLO fail, the Times of Israel has learned. Such a move, if undertaken, could lead to the financial collapse of the PA, which receives European funding estimated at between €300 and €500 million per year.

Andreas Reinicke, a German diplomat serving as the EU special representative for the Middle East peace process, told journalists at the European External Action Service — the EU organ responsible for foreign policy — that the current European stance represents growing discomfort in Brussels with Israeli construction beyond the Green Line even as negotiations are underway with the Palestinians.

“When I began my position in February, only two states supported labeling, now 14 or 15 states support it. The trend is clear,” Reinicke said.

The EU agreed last week to include Israel in its prestigious scientific cooperation project Horizon 2020 following protracted negotiations between Israeli Justice Minister and chief peace negotiator Tzipi Livni and the EU’s foreign policy chief, Catherine Ashton, on November 26. The partnership was delayed due to new European guidelines, scheduled to take effect in January, which bar funding for Israeli institutions in the West Bank.

The demand to clearly mark products manufactured in the settlements was originally initiated by the BDS movement in Europe, but the initiative is rapidly gaining traction in mainstream political discourse — a trend Israeli diplomats serving in Europe are attempting to curb. Last month, BDS activists in Ireland placed stickers reading “For justice in Palestine boycott Israel” on Israeli products sold at Tesco supermarket chain.

The worrisome blanket boycotting of Israel could be curtailed if Israel showed serious commitment to peace talks with the Palestinians, Reinicke said.

Palestinian politicians, meanwhile, are continuing to demarcate the borders between “legitimate Israel” and Israeli entities beyond the Green Line that should be shunned.

On Tuesday, PLO Executive Committee member Hanan Ashrawi called on the Dutch government to exclude settlement companies from the Netherlands-Israel Cooperation Forum set to be launched next weekend.

“This is incomprehensible and unacceptable,” Ashrawi said in a press statement. “The official policy of the Dutch government is to discourage economic relations of Dutch companies with settlements. How can the Dutch government establish a cooperation forum with Israel which facilitates these relations and effectively supports the settlement economy?”

Palestinian law bans any form of cooperation with Israeli settlements.