An internal EU report alleges that Israeli construction in east Jerusalem is part of a strategy aimed at preventing the Holy City from becoming the capital of two states.
In its Jerusalem Report 2012, a copy of which was seen by AFP, the European Union said Jewish construction posed "the biggest single threat to the two-state solution."
Authored by EU heads of mission in Jerusalem and Ramallah, the report flagged construction in three southern areas -- Har Homa, Gilo and Givat HaMatos -- as being the "most significant and problematic plans."
"The construction of these three settlements is part of a political strategy aiming at making it impossible for Jerusalem to become the capital of two states," it warned.
"If the current pace of settlement activity on Jerusalem's southern flank persists, an effective buffer between east Jerusalem and Bethlehem may be in place by the end of 2013, thus making the realisation of a viable two-state solution inordinately more difficult, if not impossible."