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The European Union is contemplating a variety of measures that would punish Israel for its occupation of the West Bank and East Jerusalem, according to an internal EU document obtained by the Israeli newspaper Haaretz.

Among the measures proposed in the document are sanctions against European companies that do business in Israeli-occupied settlements. The document also calls on the EU to reconsider funding or capacity-building activities indirectly helping to perpetuate the status quo of occupation and urges support, or non-opposition for Palestinian moves like applications to international organizations and seeking recognition. Moreover, the document proposes that European leaders consider recognizing Palestinian statehood, as more than 130 countries, including Sweden, have done.

The EU clearly intends the measures as a means of advancing the Israeli-Palestinian peace process, for even as the document proposes punitive measures targeting Israel, it also leaves the door open to punishments for Palestinians in response to adverse actions.[T]he EU could continue to dissuade [the Palestinians] from moving ahead in the context of international organizations and use its leverage to that end, the document says. Additionally, the document suggests, in line with the more for more, less for less policy, that the EU distribute more funds to Israel in exchange for Israeli actions that move the peace process forward.

Though drafted by the EUsPolitical and Security Committee in Brussels, the impetus for the proposals contained in the document was actually a coordinated push by member state leaders in response to concerns over the failure of the peace process and the policies of Israeli Prime Minister Benjamin Netanyahu.

A large group of member states pushed for this move after the failure of the talks between Israel and the Palestinians, and after the war in Gaza, European diplomats told Haaretz. The fact is that there is an agreement among all 28 member countries of the European Union to discuss measures against Israel, and that is what should worry the government in Jerusalem and the Israeli public. This paper will be handed over to the political echelon in Europe, which will decide which actions, if at all, to take, they added.

Update, 4:14 p.m.: The European Union is disputing the Haaretz report, according to Reuters. EU foreign policy chiefFederica Mogherini said Monday that the document obtained by Haaretz amounted to only a technical working hypothesis, and that the EU does not have plans to sanction Israel.

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Updated: Is the European Union about to sanction Israel?