Israel and the EU disagree - is it the first time?

Issue of east Jerusalem sparks EU-Israel row

BRUSSELS — A row broke out between Israel and the European Union Tuesday over a draft EU proposal that east Jerusalem should become the capital of a future Palestinian state as part of a Middle East peace deal.

At the heart of the diplomatic spat is a suggestion by the Swedish EU president that EU nations should call for an "independent, democratic, contiguous and viable state of Palestine comprising the West Bank and Gaza and with East Jerusalem as its capital."

However it has already caused a storm in Israel where it was first aired in the Haaretz daily.

"The process being led by Sweden harms the European Union's ability to take part as a significant mediator in the political process between Israel and the Palestinians," the Israeli foreign ministry said in a statement.

"After the important steps taken by the government of Israel to enable the resumption of negotiations with the Palestinians, the European Union must now exert pressure on the Palestinians to return to the negotiating table. Steps like those being led by Sweden only contribute to the opposite effect."

The draft text was prepared for a meeting of EU foreign ministers in Brussels next week, and diplomats said there was plenty of opposition to it within member states and it could change ahead of the meeting.

One EU diplomat said that "half disagree with this statement", adding there were now three options -- for the text to remain as it is, to be completely scrapped or for it to be in edited in some way.

The text will be worked on at various diplomatic levels trough the rest of the week but it is quite likely that it will be left for the foreign ministers to thrash out next week, the source added.

"The original text will be changed we believe."

The European Union has long supported the idea of an independent Palestinian state as part of an overall peace settlement.

But till now the 27 EU nations have not dealt so directly with the idea of splitting Jerusalem in two.

"The EU position is well known, the way forward should allow Jerusalem to become the shared capital of the two states," European Commission spokesman Lutz Guellner said.

In 2003 the international Quartet -- EU, Russia, UN, US -- called in their peace roadmap for the problem of the status of Jerusalem to be resolved with a two-state solution, but did not explicitly mention a shared capital or a divided Jerusalem.

Earlier this month the Swedish EU presidency published a statement calling for a solution whereby Jerusalem would become the capital of both Israel and a Palestinian state.

The Israelis were surprised enough at this kind of talk, one diplomat said.

"It was the first time that such language was used and the Israelis feared this would create a precedent," the diplomat said.

The formula of "Jerusalem as the capital of two states," appears elsewhere in the draft EU text.