It's as if someone was out to sabotage a role for the European Union in resolving the Arab-Israel conflict. How else to explain the leak of a confidential report drafted by British diplomats at the UK's east Jerusalem consulate for an EU ministers meeting? Britain holds the rotating presidency of the EU and Tony Blair's office was quick to urge that the anti-Israel text be seen as "reflecting not just British views but the collective views of the head of missions in Jerusalem." The EU seems to want it both ways: to be an honest broker while advocating the Palestinian cause. All this could not have come at a worse time. This week marks the 10th anniversary of the "Barcelona process." A Euro-Mediterranean Partnership meeting is taking place from today in Barcelona aimed at fostering "peace, stability and development" in the region Europe shares with the Mediterranean countries. The EU has just began providing "third party" monitors at the Rafah crossing between the Palestinian Gaza Strip and the Egyptian Sinai to ensure Palestinian compliance with Israeli security concerns. Under prompting from Washington and the EU, further Israeli concessions, including allowing bus convoys between Gaza and the southern West Bank, are set to start on December 15. The timing of this report on east Jerusalem, so critical of Israel, is also bad from our domestic point of view. Prime Minister Ariel Sharon is trying to make political hay out of the Gaza disengagement by arguing that the pullout bought him diplomatic maneuvering room on issues of consensus inside Israel. Now along comes this EU report to remind us that even integral Jerusalem neighborhoods such as East Talpiot, Gilo, Pisgat Ze'ev, Ramot and French Hill are deemed "illegal settlements." Beyond bad timing, the report is substantively wrongheaded. Where is an EU report urging Palestinian recognition of the Jewish people's ancient connection to Jerusalem? Why does this report ignore not only the past five years of violent Palestinian intransigence, but also Palestinian rejection of Ehud Barak's intended concessions on Jerusalem in 2000? Any fair-minded analysis would have recognized that it is not "Israeli policies [that] are reducing the possibility of reaching a final status agreement on Jerusalem," but, in large part, Palestinian rejectionism. For instance, the report's section on Ma'aleh Adumin warns against linking it to the capital through the E1 project by arguing that this would make it impossible for Palestinians to travel from Bethlehem to Ramallah. Nonsense. A solution that allows Palestinians a north-south transit, while linking nearby Ma'aleh Adumin to Jerusalem, is hardly beyond the creative capabilities of diplomats and transportation planners. But the biggest misnomer for anyone grappling with Jerusalem's final status may be semantic. After the city's reunification in 1967, scores of Jewish neighborhoods - such as Ramat Eshkol in the north and East Talpiot and Gilo in the south - were developed on the once-barren hills to the east, north and south of the city. Thus "east" Jerusalem frequently lies anywhere but east. Indeed, Jerusalem's Arab neighborhoods - like Beit Zafafa, Beit Hanina, and Issawiya - are located respectively on the south, north and east sides of pre-1967 Jewish west Jerusalem. Redividing Jerusalem is not an option. If the EU wants to play a positive role it should impress upon the Palestinians the realities of life: No Israeli government will agree to return to the 1949 Armistice Lines. No premier will cede the Western Wall or allow Hadassah Hospital and the Hebrew University on Mount Scopus to become a no-man's land again. There is no shortage, however, of thinking Israelis who appreciate that creative solutions will be needed to bridge the gap between Jewish and Palestinians aspirations. So if the EU ministers meeting in Barcelona want to be useful they should rein in those who think pandering to the Palestinians is the way forward. CORRECTION: Yesterday's editorial ("Unsettled") incorrectly stated that the World Bank had purchased hothouses from Gush Katif's settlers. In fact, the hothouses were purchased by private donors under the auspices of the Economic Cooperation Foundation. Some of these payments have been withheld to adjust for cases in which farmers chose to remove some equipment from the hothouses.