There is some degree of ambivalence, mistrust, and even hostility between Europe and Israel. Europeans see Israel on a path of permanent occupation of Palestinian territories. Israel sees the European posture as unbalanced and biased against Israel. Economic and institutional linkages are strong. A further strengthening of relations is however difficult unless a peaceful settlement of the Israeli-Palestinian conflict is reached. For the EU resolving the conflict is a matter of both interests and values. The engagement of the EU can take different forms, in the realm of sticks one may point to legislation concerning the labelling of products from Israeli settlements in the occupied territories and carrots such as the EU offer of a special privileged partnership with Israel. For the Israeli public a clearer perception of the costs of non-peace and the benefits from a resolution of the conflict could help unblock the stalemate and remove the deceptive illusion that the status quo is sustainable.
1. Europe and Israel mistrust each other
2. Economic and institutional linkages
3. Modalities of EU engagement: Sticks and carrots