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Israel risks losing EU research funding over settlements

JERUSALEM — Europe’s tough new stance against Jewish settlements could cost Israel hundreds of millions of dollars in European Union research grants, putting a hefty price tag on its refusal to stop building on land Palestinians want for a state.

Deputy Foreign Minister Zeev Elkin suggested Friday Israel would forgo the money rather than accept a new EU-mandated caveat that any partnership deals with Israel do not apply to the West Bank, Gaza, and East Jerusalem, lands Israel captured in 1967.

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The ‘‘territorial clause,’’ to be written into future agreements, is part of new EU guidelines and an expression of growing dismay over continued Israeli settlement expansion.

Israel is particularly concerned about losing access to Horizon 2020, a seven-year, Europe-wide research grant program that starts in 2014 with a budget of about $107 billion.

On Thursday, less than a week before Israel-EU talks on Horizon 2020 are to begin, Israeli Prime Minister Benjamin Netanyahu asked for more EU clarifications after consulting with Cabinet colleagues about the potential funding cut. It is not clear how much room there is for compromise.

The EU has insisted that new agreements be ‘‘unequivocal and explicit’’ in their territorial limitations. At the same time, Europe might want to avoid a showdown with Israel when Israeli-Palestinian peace talks are finally underway following a five-year freeze.

Elkin said Israel is eager to join Horizon 2020, but won’t do so under the current terms.

The Palestinians welcomed Europe’s stance. ‘‘For the first time, Israel finds itself face to face with a minimum level of accountability,’’ said Hanan Ashrawi, a senior PLO official.

The threat of losing EU funding has shifted the domestic settlements debate in Israel, a nation proud of its thriving high-tech and research sector.

Traditionally, opponents have argued the dozens of settlements Israel has built since 1967 in the West Bank and East Jerusalem are an obstacle to peace and divert money from Israel’s poor. Some critics warned Friday that a pro-settlement policy could hurt Israel’s innovative edge.

The confrontation with the EU ‘‘reveals the price of the continued normalization of construction in the settlements,’’ Israeli columnist Nahum Barnea wrote in the Yedioth Ahronoth daily. ‘‘It is not just ‘settlements instead of [disadvantaged] neighborhoods.’ It is settlements instead of research, instead of high-tech, instead of industry.’’

The loss of the funding worries scientists, and Isaiah Arkin, vice president for research at the Hebrew University of Jerusalem, argues Europe benefits from Israeli participation as much as the other way around.

Under the new guidelines, funded research must be conducted entirely in Israel’s pre-1967 lines. For loans, also offered by Horizon 2020, rules are even stricter; companies doing any business in the occupied lands, even if that activity is not linked to EU funding, are not eligible.

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