Report: Don't support Israeli settlements

BRUSSELS, Jan. 18 (UPI) -- Some European Union diplomats say the EU should prevent or discourage financial transactions by EU states that support Jewish settlements in East Jerusalem.

The recommendation comes in a confidential report by EU diplomats in the Israel area who urged the European Commission to draft "appropriate EU legislation to prevent/discourage financial transactions in support of settlement activity," the BBC reported.

"The systematic increase in settlement activity ... increasingly undermines the two-state solution" to the Israel-Palestinian conflict, the report said. It cites a "deteriorating situation on the ground."

The EU Heads of Mission Report on East Jerusalem, sent to the EU in Brussels this week, said Israel is "actively perpetuating its annexation" of Arab East Jerusalem, which it captured in 1967, by "systematically undermining the Palestinian presence in the city."

The report points to the "continued expansion of settlements, restrictive zoning and planning, ongoing demolitions and evictions, an inequitable education policy, difficult access to healthcare, the inadequate provision of resources and investment and the precarious residency issue."

The Palestinians hope East Jerusalem becomes the capital of a future Palestinian state but Israel doesn't want its capital divided.

A Palestinian official who spoke to the BBC about the report on condition of anonymity said: "We think it shows facts on the ground that nobody can dispute. We now expect European capitals to implement the recommendations."

Yigal Palmor, an Israeli Foreign Ministry spokesman, said Israel had not been consulted and the report is "therefore the result of an extremely dubious methodology."

"The EU treats these serial reports in the best possible way -- they are discussed briefly, their absurd recommendations are disregarded and the reports are quickly shelved," Palmor said.