The EU's foreign ministers will recognize East Jerusalem as the capital of a future Palestinian state next week, according to a Tuesday report in the Israeli daily Haaretz.
The newspaper said it obtained a draft document authored by Sweden, which currently holds the EU presidency, implying that the EU would recognize a unilateral Palestinian declaration of statehood.
The report also states that Israel is waging a diplomatic campaign to block the declaration, but diplomats close to the EU's deliberation said it was virtually inevitable.
EU foreign ministers are scheduled to meet on 7 December for a two-day meeting in Brussels on the peace process, after which a statement outlining the body's Middle East policy is expected.
According to passages of the draft quoted by Haaretz, the expected EU declaration calls on "all parties to refrain from provocative actions."
The document also says the EU Council "has never recognized the annexation of East Jerusalem.
"If there is to be a genuine peace, a way must be found to resolve the status of Jerusalem as capital of two states. The Council calls for the reopening of Palestinian institutions in Jerusalem in accordance with the road map."
The document also "calls on the Israeli government to cease all discriminatory treatment of Palestinians in East Jerusalem."
According to the newspaper, the document states that the EU will not accept any changes made by Israel to the 1967 borders unless they have Palestinian Authority approval. The EU, it says, welcomes caretaker Prime Minister Salam Fayyad's proposal to establish all the trappings of a Palestinian state within two years and would "be able, at the appropriate time, to recognize a Palestinian state."