JERUSALEM, (Reuters) – Israel said on Friday it hoped the European Union would not return to a "one-sided" policy in the Middle East after EU diplomats criticised Israeli actions in East Jerusalem as harmful to peace prospects.
Often-strained relations have improved following this year”s evacuation of settlers from the occupied Gaza Strip, one of the territories that Palestinians seek for a state.
But a draft report by diplomats in East Jerusalem and Ramallah to foreign ministers of the 25-member group recommended a more aggressive policy towards Israeli actions in Arab East Jerusalem. Israel long saw the EU as pro-Palestinian.
A spokeswoman for EU foreign policy chief Javier Solana said the report, leaked to media, was not a final document.
The report accused Israel of boosting Jewish settlement in and around East Jerusalem and also of using the route of its barrier to seal off most of East Jerusalem”s 230,000 Palestinian residents from the West Bank.
"Israeli policies are reducing the possibility of reaching a final-status agreement on Jerusalem that any Palestinian could accept," said the report.
The fate of Jerusalem, holy to Jews, Muslims and Christians, is one of the most difficult problems facing any eventual negotiations between Israel and the Palestinians.
Captured by Israel in the 1967 war, East Jerusalem was annexed as part of its "indivisible capital" in a move not recognised internationally. Palestinians want it as capital of a state that would also include the West Bank and Gaza.
Israel-EU relations grew much better after the Gaza pullout. In a clear sign of improvement, Israel agreed to EU monitoring of the Gaza-Egypt border crossing, which opened on Friday.
"It would surely be a pity if this positive momentum would stop and we would see a regression to the one-sided (European) position of the past," said Israeli Foreign Ministry spokesman Mark Regev.
Top Palestinian negotiator Saeb Erekat welcomed the report.
"The world is watching Israel”s policies and its creation of facts on the ground. The Israeli government should stop such fait accompli policies in order to revive the peace process," he said.
Palestinians believe the Gaza pullout was an Israeli ruse to strengthen its hold on East Jerusalem and big chunks of the West Bank.
The authors of the report recommended that the EU ask Israel "to halt discriminatory treatment of Palestinians in East Jerusalem, especially concerning working permits, building permits, house demolitions, taxation and expenditure".
"Israeli measures also risk radicalising the hitherto relatively quiescent Palestinian population of East Jerusalem," the report said.
An EU official said the document had been drawn up by the heads of mission of EU member states in East Jerusalem, under the leadership of the British EU presidency.
"EU foreign ministers agreed on Monday that member states will be producing a report on East Jerusalem that will be ready for the Dec. 12 (foreign affairs) council meeting. This is not the final document. Work is still ongoing," a spokeswoman for Solana said.
The EU has frequently criticised Israeli settlements and the barrier it is building in the West Bank — all of which have been branded as illegal under international law by the World Court.
Israel says the barrier stops suicide bombers. Palestinians call it a land grab.