The decision by the European Union (EU) to boycott Jewish organisations and institutions based in the West Bank and East Jerusalem will bring much joy to the Arab world in its ongoing hate campaign of denigration and demonization of the Jewish State.

The EU announcement heralds the end of any influence it has as a member of the Quartet -- America, Russia, the United Nations, and the EU -- which itself can now no longer claim to act as an impartial negotiator seeking to bring about an end to the long-running conflict between Jews and Arabs whilst the EU remains a member.

The EU cannot be surprised if Israel takes retaliatory action in response to its decision including any of the following:

1. Forbidding the transfer of EU funds to nongovernment organisations in Israel engaged in activities designed to advance the interests of the Israeli Arab population to the detriment of the Jewish majority.

2. Ending all cooperation with the EU in Area C of the West Bank by terminating existing development and infrastructure programs for the benefit of the Arab population and forbidding any such activities in the future.

3. Ordering the closure of the office of the Delegation of the EU to Israel.

A statement released by the EU Delegation on 16 July gave the following as one reason to justify the EU guidelines on the eligibility of Israeli entities and their activities in the West Bank and East Jerusalem for grants, prizes and financial instruments funded by the EU from 2014 onwards:

"The guidelines are also in conformity with the EU's longstanding position that Israeli settlements are illegal under international law and with the non-recognition by the EU of Israel's sovereignty over the occupied territories, irrespective of their legal status under domestic Israeli law."

The illegality of Israeli settlements has never been the subject of any binding authoritative legal decision to my knowledge by any court anywhere in the world.

At best the EU's longstanding position is an opinion -- and nothing else. It is counterbalanced by other opinions that take the view that Jewish settlement in the West Bank and East Jerusalem is legal by virtue of the provisions of article 6 of the Mandate for Palestine and article 80 of the UN Charter.

In fact the courts of one of the EU member states -- France -- ruled that Israel did not violate international law by building a light rail line in eastern Jerusalem.

The ruling on March 22 by the Versailles Court of Appeals came in response to a lawsuit filed in 2007 by the Palestine Liberation Organization and the France-Palestine Solaridite association against three French firms that participated in the construction of the light rail network. The plaintiffs claimed that the firms were responsible for human rights and international law violations.

In the 32-page ruling, the judges wrote that international treaties applied to Israel's occupation of lands captured in 1967 and that those conventions -- including the Hague Convention of 1907 -- state that "the occupying power can and even must establish normal, public activity in the occupied territory."

The EU position is certainly on very shaky ground.

This latest decision by the EU is the first time the EU has acted to give teeth to the political decision taken by the foreign ministers of the EU Member States at the EU Foreign Affairs Council of 10 December 2012 -- which stated

"all agreements between the State of Israel and the EU must unequivocally and explicitly indicate their inapplicability to the territories occupied by Israel in 1967"

The statement makes the EU intentions abundantly clear:

"The purpose of these guidelines is to make a distinction between the State of Israel and the occupied territories when it comes to EU support."

In declaring that the EU does not recognise any claim to legality by Israel to sovereignty in the West Bank and East Jerusalem -- the EU has purported to prejudge and dismiss Israel's territorial claims to such areas in direct contravention of a joint statement issued by the Quartet on 10 April 2002:

"We reiterate that there is no military solution to the conflict and call on the parties to move towards a political resolution of their disputes based on UNSCR 242 and 338, and the principle of land for peace -- which formed the basis for the Madrid Conference of 1991. We reaffirm our support for the objective expressed by President Bush and spelled out in UNSCR 1397, of two States, Israel and Palestine, living side-by-side within secure and recognized borders"

The EU decision has acted to interfere in the determination of secure and recognized boundaries between Israel and Palestine by pre-empting any Israeli claims of sovereignty to any part of the West Bank and East Jerusalem.

The EU is free to pursue any policy it wants -- but also must accept the responsibility for the fallout and criticism that will inevitably follow.

Does the EU now take the gracious step and bow out of the Quartet due to this conflict of interest -- or does it have to be told to get packing by the other members of the Quartet?

The EU clearly cannot be both judge and jury and the remaining three members of the Quartet must make that very clear immediately -- if they themselves wish to retain any credibility and influence in resolving a satisfactory outcome to the Jewish-Arab conflict.