Ellington

JERUSALEM (AP) — The European Union said Tuesday it has warned Israel against any new West Bank settlement construction following an upcoming Palestinian prisoner release, saying it will be held responsible for any resulting failure of the ongoing peace talks.

The warning is another sign of displeasure in Europe over Israel's settlement building and its effect on the negotiations, which have yielded no tangible results months after they started.

In the past months, Israel has announced new construction to appease public anger over Palestinian prisoner releases carried out as part of a deal that brought Israel and the Palestinians back to the negotiating table.

The EU said that if the peace talks collapse following another such announcement when a third set of prisoners is released late this month, Israel would be to blame. The Palestinians nearly walked on the talks over the last announcement of settlement construction.

"If these talks fail because of a new settlement announcement, Israel risks having a finger pointed at it," said Eyal Inbar, the EU's acting spokesman in Israel.

Inbar said that the EU message was delivered to the director of Israel's foreign ministry on Monday. Yigal Palmor, a foreign minister spokesman, declined to comment on the private discussions.

Israel has responded to the prisoner releases with settlement announcements in a bid to appease hard-liners opposed to freeing prisoners, who were convicted in deadly attacks on Israelis. Under the negotiations, which began in late July and are to conclude in April, Israel is to release 104 long-serving prisoners in four rounds.

The issue of Jewish settlements is at the core of the current impasse in Mideast peace efforts. For most of the past five years, the Palestinians refused to negotiate with Israel while settlement construction continued. The Palestinians say the settlements are a sign of bad faith. More than 500,000 Israelis now live in the West Bank and east Jerusalem, making it increasingly difficult to partition the land.

The Palestinians want a state in the West Bank, Gaza and east Jerusalem, lands Israel captured in 1967, but are willing to accept minor land swaps in drawing the final border to accommodate some of the settlements Israel has built on war-won land.

In another threat meant to spur the sides toward a deal, an EU official said Europe would tell the Palestinians on Tuesday it would cut aid off to the Palestinian Authority, which relies on donor funding to function. But such a move would hurt Israel more than the Palestinians, since it would leave Israel responsible for the fate of some 2.5 million Palestinians living under military occupation.

"If there is no deal, the EU cannot fund the Israeli occupation anymore. Israel needs to be responsible for its occupation. This means no more EU money to the PA," said the official, who requested anonymity because he was discussing private diplomatic matters. The official did not say when the funds might be cut off and it was not clear how concrete the threat was.

Europe has become increasingly vocal over the stalemate between Israel and the Palestinians.

Last week, EU auditors recommended that the bloc should stop paying the salaries of Palestinian civil servants in Gaza who haven't worked since Hamas seized the territory from Palestinian President Mahmoud Abbas in 2007, leaving him with only the West Bank. Abbas decided at the time to keep paying their salaries, on condition they stay home and not work for the Hamas government. The practice is a key tool for Abbas to maintain political support in Gaza and counter Hamas' efforts to deepen its control.

But Israel's settlement building has particularly rankled Europe, which, like the Palestinians and much of the international community, considers the settlements illegal.

The 28-member EU already bars goods produced in Israeli settlements from receiving customs exemptions given to Israeli goods. Officials in the bloc are also considering measures that would more clearly label settlement goods. The EU has also forced Israel to accept guidelines barring EU funds from supporting Israeli projects in the West Bank, east Jerusalem and other territories captured by Israel in 1967.

Still, the EU this week pledged financial and security support for Israel and the Palestinians if they reach a peace agreement.