The European Union has distributed a confidential document to its 28 member states that contains the draft of a proposal for sanctions to be imposed on Israel if it takes action in the West Bank that could make the two-state solution impossible, European diplomatic sources and senior Israeli officials said.

The representatives, who received the document from the EU’s European External Action Service (EEAS), were asked to keep its distribution limited and not to show it to Israel yet. Israeli diplomats in a number of European capitals reported the existence of the document to the Foreign Ministry, adding a few details about its content. However, they were unable to obtain the full document.

Three European diplomats and two senior Israeli officials, all of whom spoke on condition of anonymity because of the sensitivity of the issue, said the document deals mainly with “sticks and carrots” for Israel with regard to maintaining the two-state solution, although they said the document contained mainly sticks.

“The peace process is in deep freeze, but the situation on the ground is not. There is big frustration in Europe and zero tolerance for settlement activity. This paper is part of the internal brainstorming being done in Brussels these days, about what can be done to keep the two-state solution alive,” a European diplomat familiar with the details of the discussion around the document said.

According to current EU policy, any upgrading or development of ties to Israel is conditioned on actions it might carry out to advance the peace process and the two-state solution. The principle in the new document is that the EU will respond with sanctions and restrict its ties with Israel in response to actions that could make the two-state solution impossible.

European diplomats familiar with the document say it discusses Israeli actions that would constitute a red line for the EU. For example, it mentions advancement of construction in the E1 area between Ma’aleh Adumim and Jerusalem; construction of the Givat Hamatos neighborhood and additional construction in Har Homa south of Jerusalem, both of which are over the Green Line in Jerusalem. The EU believes that such construction puts at risk territorial contiguity of the Palestinian state and might make it impossible for Jerusalem to be the capital of both states.

Sanctions mentioned by the document include marking products manufactured in the settlements in EU supermarkets; limiting cooperation with Israel in various areas; and even restrictions on the free-trade agreement with Israel.

The document is in the initial stages of discussion. So far, it been discussed in two meetings of the Mashreq/Maghreb Working Party (or MaMa), which consists of diplomats from all EU countries who are specialists in the Middle East. “This paper is an uncooked dish and the process is only beginning, but it is slowly continuing,” a senior European diplomat told Haaretz.

The EU’s embassy in Israel declined to respond to Haaretz’s queries on the subject.

The document itself, and the great secrecy surrounding it, have led to concerns in Jerusalem. EU diplomats and senior Israeli officials noted that the framer of the document is Christian Berger, the director for Middle East of the EEAS. The Austrian was also behind EU sanctions against settlements in July 2013.

Senior Foreign Ministry officials said Foreign Minister Avigdor Lieberman raised the issue of the document in his talks with the EU’s new high representative for foreign affairs, Federica Mogherini, two weeks ago in Jerusalem. Lieberman asked Mogherini to make sure that any action taken by Berger – who was appointed by Mogherini’s predecessor, Catherine Ashton – conformed to her policies and directives.

Last month, Haaretz revealed that another internal EU document included directives to the EU ambassador in Israel, Lars Faaborg-Andersen, to convey a message to the Foreign Ministry and the Prime Minister’s Bureau in Jerusalem, in the name of the 28 EU countries. The message included a proposal to launch talks between the EU and Israel, with the goal of reaching understandings that Israel would refrain from crossing EU red lines concerning the West Bank that would endanger the two-state solution.

Jerusalem was concerned at the time that these talks were preparations for sanctions – a kind of hearing before punishment is delivered. Senior Foreign Ministry officials said over the weekend that the secret document containing the “sticks and carrots” shows that their concerns were well founded.

“Even before we began the talks that the EU requested, they had already started planning for them to fail and to impose sanctions,” a senior Foreign Ministry official said.