EU said to be mulling boycott of settlement goods amid deepening diplomatic crisis

The European Union will reportedly look to pass a series of sanctions against Israel next week, as Jerusalem’s relations with the bloc continue to sour following the government’s decision to expand construction in the West Bank and East Jerusalem.

The restrictions will include marking and boycotting goods made in Jewish settlements over the Green Line, the Israeli daily Maariv reported on Thursday. Such a move would likely draw a harsh rebuke from Jerusalem.

Relations between Europe and Israel hit a nadir after Israel last week announced it would expand settlement construction in response to the upgrading of the Palestinians’ status at the United Nations to a nonmember observer state.

Europe slammed the settlement plans as damaging to the peace process, with Britain reportedly threatening to recall its ambassador, while Israel expressed disappointment that every EU country but one (the Czech Republic) had declined to vote against the Palestinian resolution in the UN.

According to Maariv, the EU will also note that its economic agreements with Israel do not extend to the West Bank, the Golan Heights or East Jerusalem, and the body will condemn Israel’s building plans “with an emphasis on the intention to develop the E1 parcel.”

The E1 corridor, a strip of land connecting the capital to the Ma’aleh Adumim settlement to the east, which is seen by some as vital to maintaining a contiguous Palestinian territory in the West Bank, is the crux of the issue.

The resolution would also call on the Palestinians not to use their new status to take steps that could deepen the conflict — such as dragging Israel before the International Criminal Court. It would be brought before European foreign ministers on Monday in Brussels and was expected to pass, the report said.

Israel’s announcement that it would unfreeze plans to develop the E1 zone drew harsh criticism from some of Jerusalem’s closest allies, including the US.

The news comes with Prime Minister Benjamin Netanyahu in the midst of what is shaping up to be an awkward whirlwind tour of Europe, which included a stop Wednesday in Prague, the one European capital to vote with Israel in the UN, and another in Germany, where Netanyahu was expected Thursday to be dressed down by Chancellor Angela Merkel over the building plans and other punitive measures against the Palestinians.

Wednesday night, the two leaders had dinner and spoke for some three hours, a meeting which the prime minister’s aides said “went well.” According to a report in Haaretz, Netanyahu intends to tell Merkel on Thursday that he won’t back down from his settlement construction plans.

On Wednesday, Netanyahu told the German daily Die Welt that he was disappointed with Germany for only abstaining in the UN and not backing Israel fully.

Since the settlement announcement, at least six European countries — Britain, France, Spain, Sweden, Denmark and Italy — and the EU in Brussels have called in Israeli ambassadors to protest the plan.

Germany didn’t join them, but still issued a sharp expression of displeasure. Merkel has long criticized Israel’s settlement activities, and her spokesman, Steffen Seibert, said the move was “undermining confidence” in Israel’s “readiness to negotiate.”

On Wednesday, however, Israel pushed the settlement plan further along in the planning pipeline, and Palestinian President Mahmoud Abbas said he would seek UN Security Council help in blocking the construction.

The Associated Press contributed to this report