Israel has rejected a cultural agreement with the EU that excludes artists from illegal settlements built in the occupied West Bank, East Jerusalem and the Golan Heights.
The EU provides grants worth millions of dollars through the Creative Europe programme to cultural projects and institutions.
According to Israeli media, the agreement was brought before the Israeli cabinet last week, but was rejected despite previously being approved.
Israeli news website Wallah reported yesterday that Israel's Ambassador to the EU, Haim Regev, had sent a secret message to the government, warning of the harm to Israel if the deal is rejected.
The total budget for Creative Europe is €2 billion ($1.99 billion), the Jerusalem Post said, noting that Israel planned to contribute 33 million shekels ($9.56 million), and the Culture and Sport Ministry expected the returns to be far greater.
In 2017, the Creative Europe programme was brought before the Israeli government for a vote, but then-Culture Minister Miri Regev blocked it because it excluded illegal settlements.
"Israel will pay NIS 33m to exclude Israelis," Regev said. "The agreement sat on my table for years, and I refused to sign it… Shame!"