'EU: Israel undermines J'lem as capital of 2 states'

Report by European diplomats calls on EU to enact laws discouraging business that helps settlements, 'Guardian' reports.

European Union flags in Brussels 311 (photo credit: Thinkstock/Imagebank)
European Union flags in Brussels 311
(photo credit: Thinkstock/Imagebank)
Israel's policies in Jerusalem are "systematically undermining the Palestinian presence" in the city and making the prospect of it becoming the shared capital of Israel and a future Palestinian state "increasingly unlikely and unworkable," British daily The Independent quoted a report drafted by European diplomats as saying.
According to a Wednesday report in The Guardian, the EU Heads of Mission Report on East Jerusalem is an assessment of Israeli settlement activity's effect on the prospect for Jerusalem to serve as the future capital of Israel and a Palestinian state.
RELATED:Government slams French water 'apartheid' reportCritical EU paper draws fire from Israeli officials
The report drafted by European Union delegates to Jerusalem and Ramallah charges Israel with waging a campaign to "emphasize the Jewish identity of the [capital] city, at the expense of its Muslim and Christian residents" in efforts to annex east Jerusalem, according to The Independent.
The Guardian reported that the document characterizes the situation as "deteriorating" and cautions that "the systematic increase in settlement activity... increasingly undermines the two-state solution."
The report was approved by EU diplomats on Friday and sent to Brussels on Monday, according to The Guardian.
The confidential report called on the European Union to enact legislation to prevent or discourage European companies from doing business which benefits Israeli settlements, the Guardian added.
According to the Israeli media, the report also raises the possibility of blacklisting settlers perceived as violent from the EU.
The report also cited disparities in resource allocation to Jeruslaem's Jewish an Arab populations. According to the Independent, the report states that Palestinians represent 37 percent of Jerusalem's population but only 10% of the city's resources are spent to provide them with services.
The report also decried the lack of available schooling for Palestinian children in the capital, with less than half attending municipal schools, The Independent reported.
The report on Jerusalem followed a similar report on Area C of the West Bank released last week.
The Independent reported last Thursday that an internal European Union report says that a range of Israeli actions in Area C of the West Bank undermine the area's Palestinian population, thereby contributing to the "closing [of] the window" for reaching a two-state solution.