The EU decision, announced on Tuesday, marked a new international show of displeasure with Israeli settlements built on lands captured in the 1967 Mideast war. The Palestinians claim some of those territories the West Bank, Gaza Strip and east Jerusalem for their hoped-for state. The announcement sparked a round of condemnations from Israeli leaders, including Netanyahu, who said Israel would not accept "external edicts" about its borders.
The officials also said Netanyahu spoke to U.S. Secretary of State John Kerry about the EU decision, saying it harms Kerry's efforts to restart negotiations. Israel's chief peace negotiator, Justice Minister Tzipi Livni, met Wednesday with the European Union envoy for Mideast peace, Andreas Reinicke, and told him that postponing the ban's enforcement would help relaunch peace talks, which stalled nearly five years ago.
The EU said the ban applies to "grants, prizes and financial instruments and that the new funding guidelines go into effect in 2014. The EU issues dozens of grants, totaling millions of euros, to Israeli universities, companies and researchers every year.
Also Wednesday, Israel's state comptroller criticized Israel's lack of law enforcement in the West Bank, saying the lawlessness has allowed for illegal construction in the West Bank by both Israelis and Palestinians. In the report, the military was quoted as saying its inspectors at times encounter "strong resistance" from Jewish settlers when trying to enforce laws against illegal construction.
Some 500,000 Israelis live in Jewish settlements scattered through the West Bank and around east Jerusalem. In addition, the West Bank is dotted with smaller settlements and outposts not formally sanctioned by the government. The Palestinians and the international community view all of Israel's West Bank settlements as illegal.
The comptroller, Joseph Shapira, pointed to "significant shortcomings, some of them serious" in the coordination between the police and the military, tasked with enforcing law in the territory. Israel retains overall control of the West Bank, while a Western-backed Palestinian government has self-rule in areas where more than 90 percent of the Palestinians live.
The report noted other fields in which the law is often violated, such as water theft and environmental standards.