LONDON: The EU is preparing sanctions against Israel spanning trade, academic, security and diplomatic ties if construction begins on the controversial E1 settlement project in the occupied West Bank, Israeli media reported.
Channel 13, citing two Western diplomats, said Brussels had drawn up an initial list of measures that could be activated if Israel proceeds with construction, according to The Times of Israel.
Potential measures reportedly include special labeling requirements for Israeli products, extending beyond goods produced in West Bank settlements, as well as reducing academic cooperation and suspending some security and diplomatic collaboration with Israel.
Extending measures to products made inside Israel would mark a significant departure from the EU’s longstanding policy of distinguishing between Israel and settlements in the occupied Palestinian territories.
The report comes after Israel on Tuesday opened bidding for the construction of 1,234 homes in E1, advancing a decades-old project that has drawn widespread international opposition.
The E1 project lies east of occupied East Jerusalem between the city and the Israeli settlement of Maale Adumim. Construction there would further isolate East Jerusalem from the rest of the West Bank and effectively sever territorial continuity between the northern and southern parts of the territory, undermining the viability of a contiguous Palestinian state.
The 1,234 homes are part of approximately 3,400 housing units that received final approval from Israeli authorities in August 2025. Finance Minister Bezalel Smotrich said at the time that the project would “bury the idea of a Palestinian state.”
The EU did not immediately respond to Arab News’ request for comment.
The opening of bidding has triggered a wave of Western condemnation, with Britain, France, Germany, Italy, the Netherlands, Canada and Norway calling on Israel to withdraw the plans immediately.
In a joint statement on Thursday, the countries described the project as “unacceptable” and warned businesses against bidding for construction contracts because of the legal and reputational risks of involvement in settlement activity.
The UN has also warned of the project’s implications. Secretary-General Antonio Guterres said E1 posed an “existential threat” to a contiguous Palestinian state and called on Israel to halt further steps.
Britain has separately summoned Israel’s charge d’affaires over the tender and demanded its withdrawal.
Foreign Secretary Ed Miliband said on X that London would announce a broader package of measures in the coming weeks in response to Israeli government policies, including sanctions targeting those involved in settlement expansion.
Israeli Foreign Minister Gideon Saar rejected the British criticism, saying Israel had the right to build in the area and accusing London of damaging relations between the two countries.
Smotrich has similarly rejected international pressure over E1, saying Israel would not change course in response to “threats and sanctions.”
The latest reported EU measures would go further than previous European action targeting individual extremist settlers and groups involved in violence against Palestinians.
EU countries have already warned that settlement expansion and unprecedented levels of settler violence are undermining stability in the West Bank and prospects for a two-state solution. The bloc considers Israeli settlements in the occupied Palestinian territories illegal under international law.
