EU puts squeeze on Netanyahu

In its strongest criticism of Israel since the Oslo accords, the European Union implicitly warned yesterday that Israel's economic ties with Europe could be jeopardised by further breaches of the peace deal, particularly over Jerusalem.

A statement by EU foreign ministers made it clear that Europe's ties with Israel - as with other countries in the region - are based on "common commitment to the peace process".

The EU signed a far-reaching trade-association agreement with Israel last year, granting the country wide access to EU markets, funding for research and cultural and social links.

The last time Israel was made subject to any form of economic sanctions was when the previous United States administration withheld loan guarantees due to the continued building of illegal Jewish settlements. While resisting an open threat of sanctions, the EU statement clearly signalled rising anger, stating: "In this context it [the EU] calls on Israel to give clear practical demonstration of its confirmed intention to implement fully the agreements already reached with the PLO."

The foreign ministers' statement criticised Israel's failure to implement the Oslo accords and attacked the "disproportionate use of force" last week. It called on Israel "urgently" to keep its commitment to withdraw troops from Hebron, refrain from settlements and annexation of land, and end the closure of the occupied territories. The most stinging rebuke was reserved for Israel's intensifying efforts to enforce its illegal annexation of Arab East Jerusalem, manifested in the excavations under the al-Aqsa mosque which led to last week's violence. It made it clear that the tunnel should be "restored to its original state".

Israel occupied the east side of the city in 1967. United Nations resolutions have condemned the annexation as illegal, but Israeli propaganda has weakened international criticism. Yesterday's EU statement appeared to attempt to return to the 1967 consensus on the status of East Jerusalem, referring explicitly to it as "occupied territory".

The EU also said that the Palestinians of East Jerusalem enjoy the human- rights protections afforded them as inhabitants of "occupied territories" under the Fourth Geneva Convention. The convention states that nothing should be done by the occupying force to alter the status of the lands until their final status is decided.

The EU statement said:" The European Union recognises that the recent incidents were precipitated by frustration and exasperation at the absence of any real progress in the Peace Process and firmly believes that the absence of such progress is the root of unrest."

Speaking after the meeting, Malcolm Rifkind, the Foreign Secretary, insisted EU foreign ministers who visit Jerusalem later this month would call on the Palestinian leadership in Orient House, in Arab East Jerusalem, unless "physically" prevented from doing so.