In a letter to the bloc's top diplomat Catherine Ashton, 27 MEPs across the political spectrum urged the EU's executive, the European Commission, to reverse or at least soften the guidelines setting a January 2014 ban on funding and business deals with settlements in the West Bank and east Jerusalem.
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They urged Ashton "to take all the necessary steps to withdraw the commission guidelines or, at the very least, to come to terms with the government of Israel to ensure that their implementation will reflect the deep bilateral relations between the European Union and Israel and would by no means harm them."
The July 19 EU text angered Israeli leaders, with some accusing Europe of trying to dictate its borders.
The letter to Ashton was released as Israel's Haaretz daily said the country finally might join a European-funded research project that it had threatened to shun due to these guidelines.
The paper said Israel gave Brussels a "final proposal for the wording of the agreement governing Israeli scientific cooperation and participation in the joint Horizon 2020 initiative." It said EU officials were expected to give an answer by the end of the week.
Israel warned in August that it might refuse to participate in Horizon 2020, a seven-year 70-billion-euro ($94 billion) research and innovation plan. Israel was to contribute 600 million euros to the project.
The building of new settlements on Palestinian land is a key sticking point in Middle East peace talks.
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