The far-Left NGO Breaking the Silence was behind a leak on Wednesday of the annual report put together by heads of EU missions in Jerusalem and Ramallah, which blasted Israeli policies, saying “settlement construction remains the biggest single threat to the two-state solution.”

Israeli officials said the report was written without any consultation with Jerusalem.

The report was discussed at the EU’s ambassadorial-level Political and Security Committee in Brussels last week. It was then delegated to a bureaucratic working study group of mid-level diplomats, and will not be brought to the next meeting of EU foreign ministers in March.

As is the case each year, one diplomatic official said, the damning report generates headlines, but does not have much of an impact on overall EU policy. Nevertheless, he added, even if the findings and recommendations don’t become official policy, that they are leaked to the press ensures they will be “picked up by the chattering classes, and become accepted as conventional wisdom.”

According to NGO Monitor, Breaking the Silence has been funded heavily by the EU and by some of the body’s individual member states.

One EU diplomatic official said that while the importance of the report should not be “overstated,” it does reflect the increasing frustration in the EU towards Israel’s settlement policy.

The report prejudges negotiations and states categorically that Jerusalem will need to be the capital of two states for a two-state solution to be possible.

“If the implementation of the current Israeli policy regarding the city continues, particularly settlement activity,” the report said, “the prospect of Jerusalem as a future capital of two states, Israel and Palestine, becomes practically unworkable.”

The report slammed Israel for archeological activity around the Temple Mount, “exclusively stressing the historical connection of the Jewish people and strengthening Israeli control of the area.”

This, the heads of missions determined, “undermines the universal character of the city.”

The result of the archeological developments, the report said, was the placing of emphasis “on biblical and Jewish connotation of the area, while neglecting Christian/Muslim claims of historic-archeological ties to the same place.”

The report determined that “settlement construction remains the biggest single threat to the two-state solution.”

This construction, it read, is “systematic, deliberate and provocative, as most recently exemplified by the official announcement of more than 3,000 settlement units and the subsequent approval of an unprecedented number of plans, primarily in and around east Jerusalem, as a direct response to the Palestinian upgrade in the UN.”

According to the document, settlement activity undermines the peace process because it damages trust, jeopardizes the prospects of creating a viable and contiguous Palestinian state, and will make evacuation of settlements harder, since there will be more settlers.

The report decried expanding Har Homa and Gilo, and the building of Givat Hamatos in southern Jerusalem, as well as advancement of plans for E1 north of the capital.

The report referred to 200,000 Israelis living in “settlement neighborhoods” within Jerusalem.

“In northern Jerusalem,” the report read, “tenders for several hundred units were issued at the beginning of November 2012 for the settlements of Pisgat Ze’ev (607 units) and Ramot (606) units.”

The report further repeated the myth that development of E1 between Jerusalem and Ma’aleh Adumim would “effectively divide the West Bank into separate northern and southern parts.”

The report slammed the security barrier for having a serious “negative social, humanitarian and economic impact on east Jerusalem” without mentioning the context under which it was built – the unrelenting terrorism of the second intifada – or the security it has provided.

The report listed a number of recommendations, including:

Intensifying EU efforts to counter settlement activity in and around east Jerusalem that constitutes a particular threat to the two-state solution.

Coordinating EU monitoring and a strong EU response to prevent construction in E1.

Ensuring “strict application” of the EU-Israeli Association agreement so that products manufactured in settlements do not benefit from preferential treatment.

Ensuring that no EU programs are used to support settlements and settlement-related activity, including funding on research, education and technological cooperation.

Developing and providing voluntary guidelines for EU tour operators to prevent support for settlement business in east Jerusalem.

Increasing the monitoring of settler violence, including calling on EU member states to explore the possibility of denying entry to “known violent settlers.”

Pushing for the reopening of Palestinian institutions in Jerusalem.

Avoiding having Israeli security or protocol accompany high-ranking officials from EU member states when visiting the Old City and east Jerusalem.

Foreign Ministry spokesman Yigal Palmor responded to the report by saying, “A diplomat’s mission is to build bridges and bring people together, not to foster confrontation. The EU consuls have therefore failed miserably in that mission.”

Another official said the report, and other annual reports put out by the EU heads of missions in east Jerusalem and Ramallah, is a result of their living in an “echo chamber.”

He said the EU representatives there are forbidden to be in contact with Israeli government officials, and are only exposed to the Palestinians and the NGO community – organizations such as Breaking the Silence.

“As a result, it is not a surprise they come out with one-sided partisan reports,” he said. “This is a structural problem. One part of the EU’s foreign policy bureaucracy is institutionally anti-Israel, where their whole milieu is Palestinian activists on the West Bank and NGOs that share their same agenda.”

The official asked rhetorically when the last time was that a report by the EU consuls was either leaked, or even written, that took the PA to task for anything – be it financial wrongdoing, human rights abuses or incendiary statements against Israel.

Freshman Bayit Yehudi MK Eliahu Ben-Dahan issued a statement in response, saying the EU should remember that the British Mandate ended 65 years ago. He charged that the report was meant to further the delegitimization of Israel around the world, particularly in Europe.

Ben-Dahan added that it was inconceivable that the report would dismiss archeological artifacts as trying to promote the “narrative” of the Jewish connection to the capital.

“Israel allows the EU to establish projects in Area C for the welfare of the Palestinians,” he said. “If this is the treatment Israel gets in return, I recommend reconsidering those permits.”

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