An unofficial European Union draft report which fails to recognize Israel's right to a "united capital" could harm the newly warming relations with Europe, Israeli officials warned on Saturday. "It would damage the new friendship we have with the EU," said a senior government official. Foreign Ministry spokesman Mark Regev deplored the unbalanced draft policy statement on east Jerusalem, calling it a "throwback to the past," and explained that if it were approved it "would have repercussions on the way we perceive the European involvement here," he said. "Jerusalem will always be Israel's united capital," affirmed Foreign Minister Silvan Shalom. The draft report of an analysis on east Jerusalem, being prepared for policy adoption by the EU's External Relations Council at its December 12 meeting, was obtained by The Jerusalem Post on Friday as the EU participated in the opening of the border crossing at Rafah. Its new role there as a security monitor upgrades the EU's involvement in the area. "We never had Europeans on the ground before," said Regev. The report refers to the Jerusalem neighborhoods of Ramot, French Hill, East Talpiot, Gilo, Pisgat Ze'ev, and Har Homa as "illegal settlements." "The EU, along with most of the rest of the international community, does not recognize Israel's unilateral annexation of east Jerusalem and regards the east Jerusalem 'neighborhoods' as illegal settlements like any others," said the draft copy of the report. The report also focuses solely on Palestinian issues regarding east Jerusalem and does not honor any Israeli claims to it or Israel's declaration that it is building the security barrier to prevent terrorist attacks. The report noted that the construction was in defiance of the 2004 ruling of the International Court of Justice, thus proving that the barrier was being built for political rather than security motives. Israel was also taken to task in the report for its demolition of Palestinian homes in east Jerusalem, its reduction of work permits for Palestinians living there and its system of "discriminatory taxation." The EU also called on Israel to allow Palestinian elections to take place in east Jerusalem in January, a move that Israel has opposed. The draft report alleged that Israel's activities in east Jerusalem "are in violation of both the road map obligations and international law." It warned that Israeli actions "are reducing the possibility of reaching a final status agreement on Jerusalem and demonstrate a clear Israeli intention to turn the annexation of east Jerusalem into concrete fact." EU officials on Friday refused to confirm the document's authenticity or to comment specifically on the draft itself. But the document is widely believed to be a draft of the EU's report on east Jerusalem. Emma Udwin, spokeswoman for EU External Relations Commissioner Benita Ferrero-Waldner, told the Post on Friday that the EU has long been concerned about east Jerusalem, and made a statement to that effect at its council meeting last week. She added that the EU "feels very strongly that while everyone is thinking about Gaza that we do not lose sight of east Jerusalem" and the problems created by the route of the "separation barrier" as well as Israel's continued "settlement activity." She said that 25 foreign ministers belong to the council. "You have to conclude that 25 foreign ministers on Monday reached these conclusions because these are serious issues that need to be addressed." Like Udwin, Regev noted that the report is a draft. "Israel hasn't received the report" and the "internal EU document has not yet been given official status nor has it been adopted by the EU. Rather, we have seen a strengthening of the political dialogue and relationship," said Regev, noting that the EU's role in the Rafah crossing is a result of that improved relationship. Recently, the EU has strongly condemned anti-Semitism and taken positions against terrorism, and Syrian and Iranian actions. In the past, "Israel was reticent about having the Europeans involved because they were perceived as being identified with the other side. The fact that we have agreed to a greater European role is based on the understanding that Europe is more even-handed now," said Regev. "We would be most concerned about a regression in European behavior, which in the past tended to reflect a one-sided look at the conflict solely through the eyes of the Palestinians," said Regev. Israel, he said, has long held the belief that Jerusalem must remain "its united capital of the Jewish state. Israel has accepted limitations on its right to construct in the West Bank, but it has never accepted any limitations on its right to build in Jerusalem," said Regev.