The European Commission (EC) on Tuesday proposed suspending parts of the EU-Israel Association Agreement related to trade while also introducing sanctions on Hamas, hardline Israeli ministers, and violent settlers.

The Commission said it would halt bilateral support for Israel, with the exception of aid to civil society and the Yad Vashem Holocaust memorial. The measures would affect future annual grants between 2025 and 2027, as well as ongoing institutional cooperation projects and programs financed under the EU-Israel regional cooperation mechanism.

In practice, the move would strip Israeli imports of preferential access to the EU market.

The EC proposals follow a review of Israel’s compliance with Article 2 of the Agreement, which concluded that actions taken by the Israeli government breached essential elements related to human rights and democratic principles. This allows the EU to unilaterally suspend the pact.

The review cited the worsening humanitarian situation in Gaza after Israel’s military operation, restrictions on aid deliveries, intensified military activity, and the decision to advance settlement plans in the so-called E1 area of the West Bank, further undermining prospects for a two-state solution.

European Commission President Ursula von der Leyen posted on X, “The horrific events taking place in Gaza on a daily basis must stop.
There needs to be an immediate ceasefire, unrestrained access for all humanitarian aid, and the release of all hostages held by Hamas. The EU remains the biggest donor of humanitarian aid.

We also remain an unwavering champion of the two-state solution, which is being undermined by the Israeli government’s recent settlement actions in the West Bank. Today we propose to sanction extremist ministers and violent settlers and suspend trade concessions with Israel. And put bilateral support to Israel on hold, without affecting our work with Israeli civil society or Yad Vashem.”