Prime Minister Benjamin Netanyahu expressed fears Monday that the European Union will try to promote further sanctions against Israeli settlements in the West Bank.

“We are in a not-so-small crisis with the European Union, first on the diplomatic side,” Netanyahu told a Likud Knesset faction meeting in Jerusalem.

“They labeled products [from the settlements], and it is still not known whether [that is it] as far as they are concerned,” he added. Netanyahu did not say what other steps the EU might take against the settlements. The EU agreed last November to start labeling Israeli products made in the occupied territories.

During the monthly meeting of EU foreign ministers in Brussels next week, a decision is expected on its next steps on the Israel-Palestinian issue, but it is still not clear how harsh it will be. A number of EU nations, headed by France, have been considering the possibility of passing a resolution against the settlements in the United Nations Security Council.

In November 2014, Haaretz revealed an internal EU document that included a list of sanctions against Israel related to construction in the settlements. The document included a number of proposals, such as steps against European companies that operate in the settlements, and preventing the entry into the EU of settlers who committed violent acts against Palestinians.

Netanyahu made his comments Monday in response to a presentation by MK Yoav Kish (Likud), about a tour he took with members of the Lobby for Eretz-Israel Knesset group to Area C in the West Bank. Kish claimed the EU was aiding and promoting illegal construction by Palestinians in the area, despite the fact that Israel holds civil and security control of it.

In response, Netanyahu said EU activities in Area C are not being done for humanitarian reasons. “This is a clear political effort by the European Union,” he said. “It is crystal clear, there is no doubt about it.” The prime minister promised that he would not let the matter rest.

Netanyahu said Israel has responded very aggressively to the EU decision to label settlement products by cutting off contacts at the end of last November with the European diplomatic service and the EU institutions in Brussels on the Palestinian issue.

In practice, Netanyahu’s decision was only a symbolic step. He rejected a series of proposals for much harsher responses presented by the Foreign Ministry, and chose only the least harsh move – one that had little content except for the public declarations on the matter.

During the Likud faction meeting, Netanyahu said that if the EU renews contacts on the Palestinian issue, Israel will demand raising for discussion the question of European activities in Area C.

“We will speak to them about respecting laws and halting the illegal construction,” he said. “We have also accelerated the demolition of illegal construction in Area C over the past year.”

European activity in Area C has become a significant source of tension between Israel and the EU, as well as with a number of EU members, led by Germany and France. European countries consider Area C to make up the main land reserve for a future Palestinian state. Therefore, EU focuses its policies and efforts in that area, particularly by advancing Palestinian construction and infrastructure projects.

Israel has issued demolition orders for several such projects in Area C, established with European government funding, claiming they were built illegally and without permission. Israel refrains from carrying out the demolition orders most of the time, fearing a potential political crisis with several European countries. However, there is increasing political pressure in the Knesset to stop European operations in Area C. These efforts are led by Habayit Hayehudi MKs Moti Yogev and Bezalel Smotrich, but Likud and Kulanu MKs have recently joined the effort.