Prime Minister Netanayhu at his government's weekly cabinet meeting. Photo: Screenshot.

Israeli Prime Minister Benjamin Netanyahu on Thursday held a special cabinet session to address the European Union decision to impose sanctions on Israeli settlements, Israel’s Channel 10 news reported.

According to diplomatic sources cited by Channel 10, Israel will enter into negotiations with the EU over the implementation of their new decision, but only after Netanyahu speaks with EU foreign policy chief Catherine Ashton, to clarify what the directive would mean for institutions whose operations straddle the Green Line.

Israel wants to reach a situation whereby future agreements will ensure that the institutions within the Green Line will receive grants, even if part of their activity occurs beyond the Green Line, as the new guidelines would seem to indicate.

Last month, the European Union published new guidelines limiting interaction with Israeli entities and imposing financial sanctions on Israeli communities beyond the pre-1967 lines. The guidelines “reiterate the long-held position that bilateral agreements with Israel do not cover the territory that came under Israel’s administration in June 1967,” the EU said.

In response, Defense Minister Moshe Ya’alon ordered Coordinator of Government Activities in the Territories Maj. Gen. Eitan Dangot to suspend several joint Israeli-EU projects across Judea and Samaria and to deny EU officials the permits needed to travel freely between Israel, the West Bank and the Gaza Strip.

Channel 10 said the meeting was attended by Netanyahu, Finance Minister Yair Lapid, Justice Minister Tzipi Livni, Minister of Education Shay Piron, Economy Minister Naftali Bennett, Minister of Science Jacob Perry, Agriculture Minister Yair Shamir  and Deputy Foreign Minister Ze’ev Elkin. Ya’alon was not present at the meeting.