Israel deals 'don't apply to settlements', says EU

The European Union said on Monday that all its deals with Israel must "unequivocally and explicitly" show that they cannot apply to occupied territories, a move that builds on a November decision to label Israeli products made in the West Bank.

Palestinians welcomed the stance, while Israel accused the EU of discrimination.

Monday's meeting of 28 EU foreign ministers stressed that it "does not constitute a boycott of Israel which the EU strongly opposes".

Palestinian official Saeb Erekat said the EU announcement was "a step forward toward accountability", but that Europe should take "immediate steps" - such as banning the import of products made in illegal settlements in the West Bank - and called on greater European involvement to end Israel's military occupation of the West Bank.

Israel's Foreign Ministry said the EU statement had been "softened" thanks to lobbying by the ministry and by Israeli Prime Minister Binyamin Netanyahu, but said the EU had ignored the Palestinian Authority's responsibility for the freeze in peace negotiations.

Israel's privileged treatment of settlers extends to virtually every aspect of life in the West Bank

"This stance prevents the (European) Union from being a fair player in resolving the conflict," the Foreign Ministry statement said.

Israel occupied the West Bank in the 1967 Six Day War and more than 500,000 Israeli settlers now live in the territory and in east Jerusalem.

The EU statement called the Israeli settlements illegal and an obstacle to peace.

Unlawful and abusive

Companies operating in Israeli settlements in the occupied West Bank contribute to "an inherently unlawful and abusive system" violating Palestinian rights and should halt activity there, Human Rights Watch said on Tuesday.

The new report from the US-based rights group describes Israeli policies in the West Bank that lead to government support of settlements, the unlawful confiscation of Palestinian land and denial of permits to Palestinians.

According to the report, which cites examples of foreign firms linked to settlements, including cement and real estate companies, "Israel's privileged treatment of settlers extends to virtually every aspect of life in the West Bank."

Settlement businesses unavoidably contribute to Israeli policies that dispossess and harshly discriminate against Palestinians - HRW's Arvind Ganesan

"Settlement businesses unavoidably contribute to Israeli policies that dispossess and harshly discriminate against Palestinians, while profiting from Israel's theft of Palestinian land and other resources," HRW's Arvind Ganesan said in a statement.

"The only way for businesses to comply with their own human rights responsibilities is to stop working with and in Israeli settlements."

Some businesses are located in settlements or settlement industrial zones, often drawn by cheap Palestinian labour, low rents, or favourable tax rates.

Settlement businesses also operate on and contribute to the Israeli military's confiscation of large amounts of land in the West Bank, which it transfers to settlements.

That violates the international humanitarian law prohibition on an occupying power using the resources of the territory it occupies for its own benefit.

Some of the land is privately owned by Palestinians, violating an additional international humanitarian law prohibition, and the Israeli military severely restricts many more Palestinian landowners from accessing their farmland in the vicinity of settlements.