ByAMICHAI STEIN

European diplomats described to The Jerusalem Post the European Union's thinking behind the announcement by European Commission President Ursula von der Leyen that the EU is suspending support for certain Israeli projects. 

“We keep hearing it again and again, day after day - statements that Israel is destroying the vision of a two-state solution. And you think this can just be swept under the rug?” That’s how a European diplomat described the situation to the Post. 

So what triggered the rupture between Israel and the EU? It’s not the war in Gaza, nor the attack in Qatar. Rather, it’s the fact that senior European officials are watching as the EU’s flagship vision - the two-state solution - disappears day by day, through both official declarations and actions on the ground.

“We saw the announcement about construction in E1. It’s hard for us to understand why, at a time when Israel is already unpopular worldwide due to the war in Gaza and the humanitarian crisis, Israel would choose to approve building in a highly contentious area near Ma’ale Adumim,” another European diplomat told the Post. “You’re destroying the vision of a two-state solution - a solution that enjoys broad consensus across Europe.”

In Israel, officials are calling the development the start of a tsunami. While only a few projects may be affected initially - and these may not be particularly significant - von der Leyen's announcement that the EU will re-examine major partnerships, including the Horizon scientific collaboration project and the trade agreement (which could affect tariffs imposed on Israel), is causing concern among Israeli leadership.

Israeli Finance Minister Bezalel Smotrich and a woman hold a map that shows the long-frozen E1 settlement plan, that would split east Jerusalem from the West Bank, on the day of a press conference near the Israeli settlement of Maale Adumim, in the West Bank, August 14, 2025.
Israeli Finance Minister Bezalel Smotrich and a woman hold a map that shows the long-frozen E1 settlement plan, that would split east Jerusalem from the West Bank, on the day of a press conference near the Israeli settlement of Maale Adumim, in the West Bank, August 14, 2025. (credit: REUTERS/Ronen Zvulun)

The big question is whether Germany and Italy - who until now have effectively “plugged the dam” to prevent such EU measures - will still be willing to go out on a limb for Israel.

Netherlands bans Smotrich, Ben-Gvir from entering EU

And if that weren’t enough, the Netherlands has decided to ban Finance Minister Bezalel Smotrich and National Security Minister Ben-Gvir from entering EU territory. In other words, two sitting Israeli ministers will now be denied entry to all 29 EU member states.

Even if EU leaders had tried to prevent a major rupture between Israel and Brussels, it seems that moment has arrived. The question now is: how much can both sides do to limit the fallout - if they can at all.