Secret report warns against Israel

European governments should consider direct intervention in an attempt to curb the systematic measures being undertaken by Israel to increase its control and population in the historically - and legally - Arab eastern sector of Jerusalem, a confidential EU report concludes.

Top diplomats representing the 25 EU governments in the city, warn the chances of a two-state solution are being eroded by Israel's "deliberate policy" - in breach of international of law - of "completing the annexation of East Jerusalem".

The report also warns that rapid expansion of Jewish settlements in and around East Jerusalem, along with use of the separation barrier to isolate East Jerusalem from the West Bank, "risk radicalising the hitherto relatively quiescent Palestinian population of East Jerusalem".