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The report focuses on eastern Jerusalem, which Israel annexed in 1967 and maintains must remain the united capital of Israel.

“Israel is actively perpetuating its illegal annexation of East Jerusalem by systematically undermining the Palestinian presence through restrictive zoning and planning, demolitions and evictions, discriminatory access to religious sites, an inequitable education policy,” says the report.

However, settlement construction remains the biggest threat to the two-state solution, it says.

Construction in southern Jerusalem near Bethlehem, specifically the expansion of Har Homa, Gilo and Givat Hamatos, will “form an Israeli buffer that once complete will virtually cut off Jerusalem’s southern flank from Bethlehem and the southern West Bank,” the report adds.

“With Israel’s most recent escalation of settlement activities in and around Jerusalem, the rise of settler violence and Israeli violations of international law and Palestinian rights, it is of utmost urgency for European countries to follow this courageous assessment with concrete and tangible steps and with punitive measures,” said Palestinian legislator Hanan Ashrawi.

“Therefore, we call on the European Union, whether as individual countries or collectively, to stand up to Israel and implement bold initiatives that demand European divestment from settlements and settlement products.

Israel’s settlement campaign is the single most significant threat to the two-state solution

“Israel’s settlement campaign is the single most significant threat to the two-state solution, and now is the time to exercise the political will that is required to hold Israel accountable before any and all chances for peace are destroyed.”