Netanyahu says EU funding move undermines peace efforts

Berlin, Berlin - Israeli Prime Minister Benjamin Netanyahu said new European Union guidelines against funding projects in Jewish settlements had shaken Israel's faith in the bloc's role in peace efforts.

In comments to the German newspaper Welt am Sonntag released Wednesday ahead of publication, Netanyahu said the policy marked "the attempt to forcibly determine Israel's borders through economic pressure instead of through negotiations."

He said this was wrong, particularly at a time in which US Secretary of State John Kerry aimed to revive stalled Israeli-Palestinian peace talks.

"It hardens the Palestinian position and leads Israel to lose faith in Europe's neutrality," Netanyahu said.

He said the EU had long complained about a lack of US commitment to fostering the peace process.

"And now that it is engaged, this action undermines US efforts," he told the newspaper.

Comparing the EU guidelines, which also apply to annexed east Jerusalem, to the Berlin Wall, Netanyahu said he hoped that the issue with the EU could be resolved "sensibly".

Netanyahu convened an emergency meeting Tuesday after the EU approved the guidelines which will affect all grants, prizes and funding from the 28-country bloc from 2014 onwards, with none made available to Israeli entities beyond the 1967 Green Line.

Israeli settlements in the West Bank, including east Jerusalem, are viewed as illegal under international law.

Kerry was in Jordan for his sixth Middle East visit in as many months and was to meet Arab League officials, after dinner talks with Palestinian president Mahmud Abbas on unblocking the peace process.

Direct peace talks have been on hold for nearly three years, with the Palestinians refusing to negotiate without a freeze on settlement activity and Israel's acceptance of the 1967 lines as the basis for final status negotiations.