BRUSSELS/JERUSALEM: The European Union criticized Israel on Friday for listing some Jewish settlements in the occupied West Bank as special zones, saying the move is against the spirit of a freeze on settlement building.

“The European Union expresses its disapproval of the decision of the government of Israel on Dec. 13 to include settlements in the National Priority Areas program,” EU President Sweden said. “The decision runs counter to the spirit of the settlement freeze,” it said.

The move by Israel on Sunday entitles the communities to millions of dollars of state funding, and is seen as a gesture to settlers furious about a 10-month moratorium on new building permits in settlements after months of US pressure.

“It also prevents the creation of an atmosphere conducive to resuming negotiations on a two-state solution. The European Union encourages Israel instead to continue along the path set forth by the moratorium,” the EU said. “The European Union reiterates that settlements on occupied land are illegal under international law,” the statement said, and urged “Israel to immediately end all settlement activities.”

The communities designated as “national priority zones” will have access to credits of $41 million, which will benefit 110,000 settlers and can be used for vocational training, education or cultural activities.

Meanwhile, 10 activists were arrested on Friday during a protest against the eviction of Palestinians in annexed Arab east Jerusalem, an AFP photographer reported.

Police spokesman Micky Rosenfeld confirmed that several people were arrested in the Sheikh Jarrah neighborhood for staging an unauthorized demonstration.

Last week, 21 people, including Israeli and foreign activists, were detained during a similar protest in the east Jerusalem neighborhood, where several Palestinian families have been evicted to make way for Israeli settlers who claim legal ownership.

Israel captured east Jerusalem from Jordan in the 1967 Six Day War and later annexed it in a move not recognized by the international community.

Israel sees all of Jerusalem as its “eternal and indivisible” capital. The Palestinian want to make the city’s eastern sector the capital of their promised state.

Israel did not include east Jerusalem in its 10-month moratorium on new permits for home construction in settlements, because it does not consider its Jewish neighborhoods to be settlements.

In another development, Egyptian security officials say unidentified Gaza gunmen opened fire from across the border on workers installing an underground metal barrier to seal off weapons smuggling tunnels.

The officials say no one was hurt but some equipment was damaged in Thursday’s shooting. Hamas border officials in Gaza confirmed shots were fired twice toward Egyptian workers. All the officials spoke on condition of anonymity because they were not allowed to talk to reporters.

The border project is one of a series of measures Egypt has taken to crack down on smuggling since the end of Israel’s war on Hamas last winter.