Hitting Israel's Military Where it Hurts

It’s probably the strongest warning issued by the world's heavyweights to both Israel and Palestine.

On Wednesday, the UN, USA, EU and Russia issued a declaration in Madrid which called upon both Palestine and Israel to immediately suspend all violence.

"There’s no military solution to the conflict", the statement read. "We appeal to the leader of Israel and to the Palestinian administration to stop the senseless confrontation in the interests of their own people, their region and the international community".

UN Secretary General Kofi Anan pleaded Israel to respect the human rights of the Palestinians. "I am simply horrified about the human rights situation in the occupied territories", he said.

The high-level meeting in Madrid brings together top officials of the so-called "quartet" of countries and organisations mediating in the Middle East conflict.

It includes Spanish Prime Minister Jose Maria Aznar representing the 15-nation EU, US Secretary of State Colin Powell, the UN Secretary General Anan and the Russian Foreign Minister Igor Ivanov.

EU talks tough on trade sanctions on Israel

But more important than the actual declaration itself, is the EU’s increasingly strident tone on slapping trade sanctions on Israel.

In Strasbourg on Wednesday, members of the European Parliament voted 269 to 208 in favour of a resolution urging the EU to suspend its Association Agreement with Israel.

Under the terms of the pact, Israel sends 27 percent of its exports to EU countries – clearly preferential trade terms.

If the vote, which is not binding on EU governments, does go through, it would have far-reaching consequences for Israel’s economy.

It would also give the EU much-needed leverage in Middle East diplomacy.

Several EU members holding back

But not all EU governments are eager to rush ahead with a trade embargo on Israel.

Spanish Prime Minister Josep Pique, whose country holds the EU presidency, told Spanish radio that the EU was "beginning to contemplate" sanctions. There are some countries which favour entering into that debate, others which have more reservations".

Several EU governments are reluctant to dent their image in the Middle East or jeopardise their relationships with the strong Jewish state.

Israel’s ambassador to the EU, Harry Knei-Tal said the EU vote to impose trade sanctions was making negative headlines in Israel. "We may have a serious image problem in Europe, but you have one in Israel", he said.

EU foreign ministers will meet in Luxembourg next Monday to decide whether to hold an extraordinary meeting of the Association Council, which oversees the trade agreement with Israel.

Germany halts military exports to Israel

Meanwhile a few Western European countries including Germany, France and England have already begun delaying the export of military equipment and spare parts to Israel.

In particular German Foreign Minister Joschka Fischer has insisted upon a halt to military exports, to prevent them being used in the occupied Palestinian territories.

The "Financial Times Germany" reported that Germany stopped issuing an export license for military equipment to Israel since December last year.

According to a report in the newspaper, Israel is still waiting for the delivery of key parts from Germany for its indestructible "Merkava 4" tanks, which are presently being used in the Palestinian territories. Israel is supposed to have ordered some 120 security-related export goods in Germany.

Germany’s present stance is a clear departure from the normally close military co-operation between Germany and Israel.

But observers feel that Germany might not support the EU with outright trade sanctions on Israel, partly out of historic responsibility for the Nazi holocaust against the Jews.