The European Union has circulated a guideline for all 28 member states forbidding any funding, cooperation, awarding of scholarships, research funds or prizes to anyone residing in the Jewish settlements in the West Bank and East Jerusalem. The guideline, which will be published in the EU Journal on Friday, requires that any agreement or contract signed by an EU country with Israel include a clause stating that the settlements are not part of the State of Israel and therefore are not part of the agreement. The guidelines will go into effect on January 1, 2014.

A senior Israeli official, speaking on condition of anonymity, described the new ruling, which was published on June 30, as an "earthquake."

"This is the first time such an official, explicit guideline has been published by the European Union bodies," the senior official said. "Until today there were understandings and quiet agreements that the Union does not work beyond the Green Line [the pre-1967-war border]; now this has become a formal, binding policy."

The official noted that the significance of the regulation is both practical and political: From now on, if the Israeli government wants to sign agreements with the European Union or one of its member states, it will have to recognize in writing that the West Bank settlements are not part of Israel.

In the Prime Minister's Office and Foreign Ministry there is great tension and anxiety over the new regulation and its implications for Israeli-EU relations. The efforts of Prime Minister Benjamin Netanyahu and Deputy Foreign Minister Ze'ev Elkin to stop the move have all failed. Senior EU officials say they would like to hold talks with Israel concerning the new guideline, but since it will go into effect by the end of this week, the chance of its being amended is extremely slim.

"We will have to decide what to do from this day forward," a senior Israeli official said. "We are not ready to sign on this clause in our agreements with the European Union. We can say this to the Europeans, but the result could be a halt to all cooperation in economics, science, culture, sports and academia. This would cause severe damage to Israel."

The new guideline was circulated by the European Commission, which is the executive branch of the European Union. The ruling determines the parameters for cooperation between the Union, along with its member states, and Israeli private and governmental entities between 2014 and 2020.

The most significant part of the guideline is its "territorial clause," which for the first time will appear as a binding rule on all agreements between the European Union and Israel. The new clause determines the areas in Israel that are entitled to cooperation with the Union, and those that are not. The territorial clause determines that all agreements will be valid only within Israeli borders recognized by the European Union, meaning the borders prior to the 1967 Six-Day War.

The new guideline forbids any cooperation by European Union members with private or governmental bodies located beyond the Green Line. It allows cooperation with Israeli government offices in East Jerusalem, such as the Justice Ministry, but only if the activities themselves are carried out within the 1967 borders.

EU: 'Prevents boycott of Israel'

Senior European officials briefed the Israeli delegation to the European Union in Brussels about the new guideline immediately after it was published, and offered to discuss how it would be implemented in pending agreements.

Thus, for example, the new guidelines are already in force in negotiations between Israel and the European Union over the EuroMed Youth agreement, which deals with joint youth projects, conventions, classes and exchanges of delegations. EU negotiators told Israeli representatives that the EuroMed Youth agreement must include the 'territorial clause' spelling out that the pact can only be implemented within the Green Line.

EU officials said the new guidelines were drawn up as a result of the decision by European foreign ministers last December, which stated that "all agreements between the State of Israel and the EU must unequivocally and explicitly indicate their inapplicability to the territories occupied by Israel in 1967."

The EU delegation is Israel further noted: "The guidelines are also in conformity with the EU's longstanding position that Israeli settlements are illegal under international law and with the non-recognition by the EU of Israel's sovereignty over the occupied territories, irrespective of their legal status under domestic Israeli law."

The new guidelines are intended to prevent a boycott against Israel, and to enable Israel to cooperate in EU projects and benefit from the funding they bring, the delegation pointed out. The European Union "wants to be sure that Israel's participation is not put in question so that Israel will be in a position to make use of all possibilities offered by the new financial framework," the delegation stated.

Open gallery view A stop sign outside the West Bank settlement of Ma’aleh Adumim. Credit: Reuters