Israel to reject EU deal over settlement clauses

Israel's stance could jeopardise its participation in a Dh389 billion research programme that begins next year and might also complicate the resumption of Israeli-Palestinian peace talks being steered by the US secretary of state, John Kerry.

RAMALLAH // Israel said yesterday it would reject the European Union's anti-settlement guidelines, even though it could risk losing more than a billion euros in grants from the bloc.

Zeev Elkin, the Israeli foreign minister, said his government would not sign on to the guidelines that ban EU support - including research grants, prizes and scholarships - to Israeli organisations with a direct or indirect connection to land captured during the 1967 Arab-Israeli war.

Israel's stance could jeopardise its participation in Horizon 2020, a seven-year, €80 billion (Dh389.02bn) research programme that begins next year. It could also complicate the resumption of Israeli-Palestinian peace talks being steered by the US secretary of state, John Kerry.

Mr Elkin said he hoped to renegotiate the terms of the EU anti-settler guidelines to guarantee Israel's participation in Horizon, which aims to help countries develop new technologies and drive economic growth.

If it joins, Israel would pay in about €600 million and likely receive more than €1bn in grants.

"We want to sign and we are ready to negotiate, but if the conditions are as they are today," he told Israel Radio, "we can't sign."

Mr Elkin's announcement followed a cabinet meeting on Thursday called by Israel's prime minister, Benjamin Netanyahu, to discuss the issue. Officials in his government have responded with a mixture of anger, surprise and defiance to the EU measures, which were announced last month amid rising European frustration with the expansion of Israeli settlements.

About 560,000 settlers live in East Jerusalem and the West Bank - Israeli-occupied territories that along with the Gaza Strip are wanted for a Palestinian state.

The last round of talks between Israelis and Palestinians were held in 2010, but collapsed because Mr Netanyahu refused to stop constructing settler homes.

Under the EU guidelines, Israel must state clearly that funding will not go to settlements, which are considered illegal under international law.

The EU is Israel's largest trading partner, but adhering to its guidelines could be difficult for the government led by Mr Netanyahu because of its pro-settler bent. Several prominent ministers live in settlements, including Mr Elkin.

Michael Mann, a spokesman for the EU foreign policy chief, Catherine Ashton, said the organisation was planning to seek clarifications from Israel on the issue, although it appeared unlikely that it would change its position on the guidelines.

"We stand ready to organise discussions during which such clarifications can be provided and look forward to continued successful EU-Israel cooperation, including in the area of scientific cooperation," he said.

The EU guidelines have reportedly been criticised by My Kerry, whose shuttle diplomacy convinced Israel and the Palestinians to return to talks.

Mr Kerry held a briefing on the talks at the White House on Thursday with prominent US Jewish leaders, during which he criticised the EU guidelines as an impediment to Mr Netanyahu participation in negotiations, the Jewish Telegraph Agency reported yesterday.

Israel's government has plans to build 1,000 new settler homes in the West Bank, as negotiators from both sides prepare for talks to be held in Jerusalem on Wednesday.

Hanan Ashrawi, a senior Palestine Liberation Organisation official, warned on Thursday that negotiations could fail if settlement construction continues.

"This is their way to sabotage Mr Kerry's effort to begin peace talks," Mrs Ashrawi said.

The Palestinians had demanded a halt to construction on settler homes before negotiations could resume, but Mahmoud Abbas, president of the Palestinian Authority, appears to have backed down from the demand.

* Additional reporting from Associated Press