UPDATE: Following this report and Culture and Sports Minister Miri Regev pulling her support for the proposal, the cabinet secretariat announced that the issue will be taken off the agenda of Sunday's cabinet meeting.

Prime Minister Benjamin Netanyahu was to present a proposal to the cabinet on Sunday to join a European Union cultural and media initiative that includes a clause that excludes such programs in the settlements from receiving European grants because they are not part of Israel.

The proposal, to be submitted by Netanyahu in his role as foreign minister, states that Culture and Sports Minister Miri Regev, Finance Minister Moshe Kahlon and Economy and Industry Minister Eli Cohen support it.

The significance of the proposal is that the government of Israel would in effect be agreeing to a European boycott of the settlements in the West Bank, East Jerusalem and the Golan Heights.

The program, called Creative Europe, involves cooperation between EU and non-EU countries in the areas of culture and media. Joining it would mean the transfer of over 1 million euros ($1.069 million) of Israeli taxpayers’ money to the EU, to cover Israel’s participation in the initiative.

If the cabinet green lights the move, Israeli cultural institutions and individual artists would then be able to apply for EU grants from the pot of 1.46 billion euros (up to the year 2020).

The grants would be awarded for, among other things, joint theater or dance company projects; joint ventures between plastic arts institutions; training in film production and the promotion of film festivals; the translation of works from Hebrew to European languages; and funding of joint film and television series projects.

Cultural institutions and individual artists from 10 non-EU countries are currently members of the initiative and can apply for grants. The grants are evaluated by independent experts.

The EU suggested to Israel that it be part of the program in 2013. In 2014, the directors general of the culture and foreign ministries informed the EU that Israel would like to join.

Countries joining the initiative must pay a fee based on their gross domestic product. In Israel’s case, the government would approve 1.28 million euros for membership in 2017.

The explanatory notes accompanying the proposal state that the agreement includes a territorial clause by which it would not apply to cultural institutions or artists beyond Israel’s 1967 borders.

The wording of the current agreement is identical to the Horizon 2020 agreement signed with the EU in 2014, which involves cooperation in the area of research and development.

The document distributed to ministers ahead of Sunday's cabinet meeting states that, as with the 2014 agreement, Israel would append a separate letter to the agreement in which it would maintain its stand in principle on the matter of the settlements. Israel would do this in order that it could participate, despite the gaps between it and the EU on the Palestinian issue.

The letter is a symbolic gesture meant mainly for internal political consumption in Israel.

By joining the initiative, Israel would be showing its willingness to accept the exclusion of cultural institutions from the settlements in exchange for EU funding of institutions within Israel.

MK Regev (Likud), who is in favor of Israel joining the initiative despite the exclusion of the settlements, attempted to deny government funding last year for cultural institutions that declined to appear in settlements, and to give extra support to cultural institutions that did appear in them.

The explanatory notes to the proposal outline many advantages to Israel’s joining Creative Europe, particularly giving Israeli media and cultural institutions the opportunity to vie in an egalitarian manner for EU grant money, and adding outside funding to Israel’s cultural and media industry. Another advantage of joining the initiative, according to the document, is to create a joint platform for activities between Israeli cultural institutions and their European counterparts.

“There is importance in strengthening the ties between Israel and the EU, based on shared history and cultural values,” the document states, adding that Israel’s joining Creative Europe “will also be a response to efforts to delegitimize Israel in Europe.”

Foreign Ministry spokesman Emmanuel Nahshon said the proposal did not signify a “change in Israel’s attitude toward the territorial issue as it appears in the draft agreement, and appeared in similar agreements in the past between Israel and the EU,” noting that Israel expressed its position in other agreements, such as Horizon 2020.

The agreement would contribute significantly to the promotion of Israeli culture in Europe, he added.