The Israeli government is concerned that if the newly revived peace talks between it and the Palestinians fail, it will be blamed — with severe diplomatic consequences.
Officials in Jerusalem have expressed fears that any collapse in the peace process would lead to a renewed diplomatic push aimed at forcing Israel to relinquish control of the West Bank and East Jerusalem.
Previously, Israeli concern has focused on Palestinian initiatives in forums such as the United Nations and the International Criminal Court in The Hague.
That has now been replaced by worries that the European Union has decided to involve itself more forcefully on the side of the Palestinians.
Last week’s letter circulated to EU commissioners by foreign policy chief Baroness Ashton, in which she sought their support to push through labelling guidelines, has only added to these concerns.
On a trip to London this week, Israeli Minister for Intelligence Yuval Steinitz met British Foreign Secretary William Hague and warned him that Baroness Ashton’s move on labelling could destroy the peace process.
Mr Steinitz said: “We hope that steps will not be implemented by some countries, by our friends, including in London.”
Israeli diplomatic sources have made clear that while co-operation on issues such as the Iranian nuclear programme and Syria is as strong as ever, “there has been a worrying trend on the settlement issue” — and a growing fear of linkage between the Iranian and Palestinian issues.
The Israeli government agrees in principle with most of US State Secretary John Kerry’s proposals on the peace talks. But Mr Kerry’s formula for negotiations was set out before the EU’s decision last week that every new co-operation agreement between it and Israel must state that the West Bank and East Jerusalem are occupied territory and not part of sovereign Israel.
Prime Minister Benjamin Netanyahu was said to have been perturbed by the American administration’s refusal to criticise the European move in any way.
The real economic impact of the new EU guidelines is still uncertain, and may not be as severe as some at first assumed. Nor is it clear how any new EU move on labelling settlement goods can ever be enforced. But both moves are being taken as a warning of what to expect if the peace process does not progress. Israel will, it is thought, be blamed by the EU.
In her letter, Baroness Ashton called on the commissioners to adopt “a non-binding Commission notice” which would enable the labelling of all settlement products being sold in the EU.
Israel has signed customs agreements in the past with the EU which exempted settlement products from the preferential tariffs enjoyed by Israeli products. But it has firmly opposed the labelling of those products, claiming that it was tantamount to boycotting Israeli citizens.
Five years ago, former prime minister Gordon Brown tried to launch a European plan for labelling settlement goods but failed to gain significant support. Israeli diplomats believe that the current plan originated with Baroness Ashton rather than in London.