Israel is facing punitive measures from the EU because of hardening and widening opposition to its policies towards the Palestinians, diplomats were quotes as saying in a report by The Guardian Tuesday.
EU member states, including Britain, are now actively debating changing their approach to the Jewish state, with decisions expected at two key foreign ministers' meetings next month, said the Guardian.
According to the report, France is leading a campaign to suspend Israel's prized association agreement with the EU, which gives it preferential trade terms worth millions of dollars.
A more likely result will be a crackdown on Israel's flouting of EU "rules of origin" under which goods produced in occupied territories have been illegally benefiting from duty free access.
The EU is also likely to cold -shoulder Israeli attempts to secure enhanced cooperation in science and technology, said the Guardian.
In the latest in a series of signals that it cannot be business as usual with the Israeli prime minister, Ariel Sharon, Brussels last week issued an angry condemnation of Israeli attacks on both Syria and Palestinians in Gaza.
Israel has insisted that the statement was one-sided, and warned that the EU is in danger of losing what little influence it has.
Romano Prodi, the president of the European commission, and Chris Patten, external relations commissioner, are being targeted by Israel to persuade them to adopt a softer line.
The EU has adopted an Egyptian-Israeli initiative to stop the cycle of violence in the Palestinian lands and Israel so that peace negotiations can resume. Israel initially rejected the plan, but after mounting criticism in the international arena of its practices, including a two-day reoccupation of PA controlled areas, the Israeli government accepted the proposal, with some reservations on its wording – Albawaba.com
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