NEW YORK, Nov 25: A European Union report has blasted Israel’s policies in East Jerusalem, saying they ‘are reducing the possibility of reaching a final-status agreement on Jerusalem that any Palestinian could accept’.

The report, printed by the New York Times in its Friday edition, recommends a more aggressive European stance toward Israeli policies in East Jerusalem, whose annexation by Israel has not been recognized by the European Union or the United States.

The report, which will be presented to European Union foreign ministers, and their representatives, accuses Israel of increasing illegal settlement activity in and around East Jerusalem and of using the route of its separation barrier ‘to seal off most of East Jerusalem, with its 230,000 Palestinian residents, from the West Bank’ and to create a ‘de facto annexation of Palestinian land’.

In general, the report asserts, ‘prospects for a two-state solution with East Jerusalem as the capital of Palestine are receding’, and it warns that ‘Israeli measures also risk radicalizing the hitherto relatively quiescent Palestinian population of East Jerusalem’.

The European Union diplomats made a number of recommendations, including having political meetings with Palestinian Authority ministers in East Jerusalem instead of in the West Bank, as they currently do, and requesting Israel ‘to halt discriminatory treatment of Palestinians in East Jerusalem, especially concerning working permits, building permits, house demolitions, taxation and expenditure’.

Last Monday in Brussels, European Union foreign ministers issued a statement expressing ‘grave concern’ about Israeli policies ‘in and around East Jerusalem, including construction of the separation barrier, settlement building and house demolitions’.

But the ministers decided not to release or acknowledge the report at a delicate time in European-Israeli relations, instead asking for a ‘detailed EU analysis on East Jerusalem to be adopted and made public’ at their next meeting next month.

The report says that Israel is making it increasingly difficult for Palestinians to travel between East Jerusalem and the West Bank. “Israel’s main motivation,” the report asserts, “is almost certainly demographic - to reduce the Palestinian population of Jerusalem, while exerting efforts to boost the number of Jews living in the city.”

The official acknowledged that Israel and EU disagreed about the legal status of East Jerusalem and of Jewish settlements within it. Israel does not regard the Jewish inhabitants of East Jerusalem as settlers.