(JERUSALEM) - Israel's policies in occupied east Jerusalem are harming the prospect of the Palestinians having their future capital there, which "seriously endangers" a two-state solution, the EU said on Tuesday.
"If current trends are not stopped as a matter of urgency, the prospect of east Jerusalem as the future capital of a Palestinian state becomes increasingly unlikely and unworkable," warns an annual EU report seen by AFP.
"This in turn seriously endangers the chances of a sustainable peace on the basis of two states, with Jerusalem as their future capital."
The Jerusalem Report 2010, which contains a series of European Union policy recommendations, was put together by the EU heads of mission based in the Holy City, as well as those based in the West Bank city of Ramallah.
But the report was rejected by Israel, with a spokesman for the foreign ministry insisting that Jerusalem would never again be redivided.
"Those who believe our policies endanger Jerusalem are the same who see a redivision of the city into two parts as the only solution," Yigal Palmor told AFP.
"It is clear that a real solution cannot involve a return to the situation that existed before 1967, when the city was divided by a wall, barbed wire and elite Jordanian snipers."
The EU report said that since the start of November, east Jerusalem settlement planning had resumed "very intensively" and warned that such a policy, combined with curbs on Palestinian building and increased demolitions and evictions in the sector, were having "serious humanitarian consequences."
Around 270,000 Palestinians live in east Jerusalem, but under the current planning regime, only 13 percent of the land there is zoned for them to build on, compared with 35 percent for the Jewish settlements, the report said.
Over the past few years, the Palestinians have received only 200 building permits per year, when they need closer to 1,500.
Such policies were also harming east Jerusalem's "crucial role" in Palestinian political, economic, social and cultural life, and causing it to be increasingly isolated from the rest of the occupied West Bank.
Israel's attempts to exclusively emphasise the Jewish identity of the city were threatening to "radicalise the conflict, with potential regional and global repercussions."
And the report warned of the EU's increasing concern about Israel's "use of archaeology as a political-ideological tool" in a bid to cement the Jewish state's hold over the entire city.
The report concludes with a series of recommendations which call on senior EU officials "to regularly host Palestinian officials" at their offices in east Jerusalem, and to avoid having Israeli officials or security accompanying them on visits to the city's eastern sector.
It also recommends advising EU tour operators to avoid settler businesses in east Jerusalem, such as hotels and archaeological sites run by settler groups.
And it proposes ensuring an EU presence when there is a risk that people may be evicted or have their homes demolished in east Jerusalem.
Permits for Palestinians to build in east Jerusalem are extremely rare and Israel frequently issues demolition orders despite the sensitive nature of such operations on land the Palestinians want as capital of their future state.
Israel occupied and annexed east Jerusalem in 1967 and considers it its "eternal indivisible capital," in a move never recognised by the international community.
The future of east Jerusalem is one of the most sensitive issues in peace talks, which have been deadlocked since the end of September in a row over Jewish settlement building in occupied territories.
The report would inform European ministers when they next discuss Middle East policy, said a spokeswoman in Brussels, Maja Kocijancic.
"It is an internal report, quite routine and factual on what has happened in Jerusalem in 2010. It confirms EU concerns regarding facts on the ground and the negative bearing they have on the peace process," she said.
Text and Picture Copyright 2010 AFP. All other Copyright 2010 EUbusiness Ltd. All rights reserved. This material is intended solely for personal use. Any other reproduction, publication or redistribution of this material without the written agreement of the copyright owner is strictly forbidden and any breach of copyright will be considered actionable.