"This represents a further highly detrimental step that
undermines prospects for a two-state solution and calls into
question Israel's commitment to a peaceful negotiated settlement
with the Palestinians," the European Union's External Action
Service said in a statement.
"We stress that the future development of relations between the
EU and Israel will depend on the latter's engagement towards a
lasting peace based on a two-state solution," the EEAS said.
(Reporting by Robin Emmott; editing by Barbara Lewis)
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