"As Israel's prime minister, I will not allow hundreds of thousands of Israelis living in Judea, Samaria, the Golan Heights and our united capital of Jerusalem to be harmed," Benjamin Netanyahu declared. “We will not,” he added, “accept any external dictates regarding our borders."

The existential threat the Prime Minister was referring to was not a new development in Iran’s nuclear program or the acquisition by Hezbollah and Hamas of cutting-edge missiles, but rather by the publication of new EU guidelines about Israel’s eligibility to receive grants and prizes funded by the Union.

Ze'ev Elkin, Israel's deputy Foreign Minister, followed the premier’s cue, asserting that the new guidelines were a "big mistake… This is more fuel for Palestinian rejectionism." Another minister, Silvan Shalom, went on the offensive noting that, “Once again, Europe has demonstrated just how detached it is, how it can't really be a full partner to negotiations."

Notwithstanding Israel’s accusatory hype about “the imminent threat” posed by the EU, the new guidelines merely reaffirm a long-standing EU political and legal principle: Agreements with Israel only apply to the country’s pre-1967 borders, known as the Green Line. Since current agreements between Israel and the EU do not explicitly specify what constitutes the “territory of the State of Israel,” the role of these guidelines is to require EU institutions to insert a clear territorial clause to ensure that all registered Israeli entities whose activities are carried out beyond the Green Line cannot enjoy EU support. Importantly, however, the new guidelines primarily involve funding for research and development.

Israel’s Minister of Science, Technology, and Space, Jacob Perry, seems to have understood this, but for some mysterious reason declared that Israel could lose “up to 40% of its academic research and development funding” due to the new rules. Considering that the newly accredited Ariel University, which is located deep in the West Bank, receives nothing from the EU, it is unclear how Perry reached this conclusion. It is also extremely unlikely that the research departments at Soda Stream, Ahava and other Israeli industries in the Occupied Territories have ever received funding from the EU, suggesting that the guidelines will not really have any economic effect at all on Israel.

All of which begs the question: Why is the Israeli government so hysterical? After all, the EU is simply reasserting the internationally recognized Green Line between Israel and the Occupied Territories.

For one thing, this latest—if mini—saga serves to underscore a crucial fact: Regardless of what Israeli leaders might say to the U.S. Secretary of State John Kerry or to any European diplomats involved in the Israeli-Palestinian negotiations, the government has no intention of withdrawing from the territories it has illegitimately held since 1967. Indeed, according to this Israeli government as well as many of its predecessors, the very thought of some kind of territorial withdrawal from the West Bank constitutes an existential threat and is therefore something to which Israel can never concede.

Israel’s reaction should accordingly serve as a wake-up call to all those international leaders who still believe that the two-state solution is the only solution. It is high time for a paradigm shift and to begin thinking seriously about an alternative that advocates a single democratic state in which Jews and Palestinians live together as equals.

Neve Gordon http://www.israelsoccupation.info/is a member at the Institute for Advanced Study at Princeton and Professor of Politics and Government at Ben-Gurion University.