The European Parliament on Thursday compared injuries to Palestinians by Israeli military action to "acts of terror," and called for a suspension of the Israel-EU Association Agreement, should Israel persist with its policy of assassinations.
Israeli observers called the decisions "a difficult day" for relations between Israel and the European Parliament, but said that they did not believe that the situation would decline to the paucity of ties two years ago, during the Israel Defense Forces' extensive "Operation Defensive Shield."
The decisions were made following a stormy day of debates. When it became clear that there would not be a majority in favor of an immediate suspension of the Association Agreement, two compromise articles were passed with a majority of votes.
Article 41 stated that the European Parliament "reiterates its condemnations of all terrorist acts against civilian populations committed by both sides," while article 43 called on the Palestinians "not to respond to this most recent provocation [the assassination by Israel of Hamas leader Sheikh Ahmed Yassin – S.S.] in order to stop the spiral of violence and terrorism."
Article 43 also stated that the Parliament "reiterates in this respect its position of 10 April 2002 and calls on the Council and Commission to consider acting in full compliance of article 2 of the association agreement with Israel in case of continuation of the policy of extra-judicial killing," a reference to suspending the agreement.
Also Thursday, a European Parliament probe said that European Union aid has not been siphoned off to Palestinian militants carrying out attacks on Israelis, but some lawmakers disputed the findings.
The EU is the biggest donor to the Palestinian Authority. Alleged misuse of the funds has also prompted a probe by the EU's anti-fraud office OLAF. The parliamentary inquiry looked at monies handed out from the end of 2000 to the end of 2002.
The parliamentary committee met Palestinian officials during the course of its probe. It also looked at documents handed over by the Israeli army and intelligence, which both alleged that EU financial assistance was diverted to finance terrorism.
"There is no conclusive evidence, to date, that the EU non-targeted direct budgetary support was used to finance illegal activities, including the financing of terrorism," said the draft report adopted by the committee of inquiry.
But showing the controversial nature of the issue, a minority group of committee members backed slightly different findings.
While agreeing there was no formal proof EU funds were used to finance militants, they said suspicions existed that Palestinian Authority Chairman Yasser Arafat had indeed authorized such payments.
The European Commission, responsible for channelling the funds to the Palestinian Authority, was pleased that the main report found no financing of guerrillas.
Commission external affairs spokesman Emma Udwin also noted that the EU had changed the way it funded the Palestinians and now targeted aid for specific purposes.
Before, it was handing over 10 million euros ($12 million) a month to help pay the salaries of Palestinian public sector workers.
From April 2003, it started a new system of allocating two tranches worth 40 million euros each. Money is only handed over if various conditions are met, such as the presentation of invoices for bills the Palestinians need to pay.