BRUSSELS

 The EU’s top diplomat unveiled plans Wednesday to downgrade trade ties with Israel and sanction top officials over findings of human rights abuses in Gaza, marking a major shift in the bloc’s approach to Tel Aviv.

Kaja Kallas said that all member states agree that the situation in Gaza is "untenable," while also cautioning that "dangerous developments" in the West Bank threaten the viability of a two-state solution.

"I want to be very clear, the aim (of the new measures) is not to punish Israel. The aim is to improve the humanitarian situation in Gaza," she said.

Speaking after a meeting of the commission, she also criticized the Israeli government's military push into Gaza City, calling it a new escalation that will only worsen the humanitarian crisis.

"All member states agree that the situation in Gaza is untenable. The war needs to end. The suffering must stop, and all hostages must be released. We must use all the tools we have towards this outcome. We must also not lose sight of the dangerous developments in the West Bank that reduce the viability of a two-state solution," she added.

Kallas also highlighted that the public across EU member states is increasingly demanding action to stop the suffering in Gaza. "The public opinion in member states is really shifting because the suffering in Gaza is visible, and people want to see an end to this suffering on a political level," she said.

Maros Sefcovic, European commissioner for trade and economic security, said the proposal targets key provisions of the Euro-Mediterranean Agreement, including the free movement of goods, services, public procurement, competition, and intellectual property.

"In practice, this means that imports from Israel to the EU will lose the preferential access to the EU market, and that these goods will be charged duties at the level applied to any other third countries with whom the EU has no free trade agreement," he told a press conference in Brussels.

Sefcovic emphasized that the EU remains Israel's largest trading partner, with total trade in goods in 2024 reaching €42.6 billion ($50.4 billion), or nearly a third of Israel's total trade.

"In light of these figures and the principles at stake, the proposed partial suspension, it's a carefully considered response to an increasingly urgent situation," he added. The EU Council will decide on the proposed trade measures by a qualified majority.

The commission also announced sanctions on Palestinian resistance group Hamas, extremist Cabinet ministers of the Israeli government, and violent settlers. The EU Council now needs to approve the decision unanimously.  

'Situation in Gaza and West Bank is unacceptable'

Dubravka Suica, European commissioner for the Mediterranean, said the commission is also halting bilateral support to the Israeli government, including around €14 million allocated for 2020–2024, with €4.3 million of that contracted and €9.4 million uncontracted.

"The situation in Gaza and in the West Bank is unacceptable. As the commission, we continue to advocate for a two-state solution, one based on a secure Israel and the viable Palestinian Authority," she said, adding that the suspension of funds can be revoked if conditions on the ground improve.

The commission clarified that support for combating antisemitism and fostering Jewish life will remain unaffected, including funds for civil society initiatives.

"Reflecting these principled commitments, and taking into account serious recent developments in the West Bank, we propose to suspend trade concessions with Israel, sanction extremist ministers and violent settlers, and put bilateral support to Israel on hold, without affecting our work with Israeli civil society or Yad Vashem" – Israel's World Holocaust Remembrance Center – European Commission President Ursula von der Leyen said in a statement following the announcement.

"The horrific events taking place in Gaza on a daily basis must stop," she added.

The Israeli army has killed almost 65,000 Palestinians, most of them women and children, in Gaza since October 2023. The relentless bombardment has rendered the enclave uninhabitable and led to famine and the spread of disease, alongside a deadly famine.