An Israeli diplomatic offensive over the weekend, led personally by Prime Minister Benjamin Netanyahu, brought about a "softening" of an EU resolution aimed at upping the pressure on Israel over the settlements.

The original draft resolution was designed as a follow-up to the settlement goods labelling guidelines issued by the EU two months ago.

A such, it was due to specify that the EU viewed all Israeli entities in the West Bank, East Jerusalem and the Golan Heights as illegal and targets for further sanctions if progress was not made towards a two-state solution.

Israeli lobbying, however, convinced a number of EU members to oppose the draft resolution. What was issued on Monday in Brussels was a reiteration of the EU's existing policy that all agreements signed with Israel apply only to the pre-1967 territories, but to oppose all forms of boycott of Israel.

The EU foreign ministers meeting has also highlighted the emergence of two blocs on Israel. While the "big five" - the UK, France, Germany, Italy and Spain; critical allies of Israel - are promoting a harsher policy on the settlements, Greece, Romania, Hungary, Poland and the Czech Republic are blocking further punitive measures.