A diplomatic row between the European Union and the Israeli government could spell a sharp loss in funding for Israeli science as well as the end for countless collaborations with European scientists. At issue are 3 pages of guidelines issued by the European Commission on 19 July , which stipulate that starting in 2014, E.U. grants, prizes, and financial instruments may not support organizations or activities in areas not under Israel's control before 1967—which include the occupied West Bank, East Jerusalem, the Gaza strip, and the Golan Heights.
In an angry response, the Israeli government said last week that it may forgo participation in Horizon 2020, the European Union's new €70 billion, 7-year research program. The two sides had a first round of talks about Horizon 2020  at the E.U. Delegation's Tel Aviv office on 14 August and will continue discussions in Brussels in September. An Israeli withdrawal would put an end to 17 years of successful participation in E.U. science funding schemes.
The European Union stresses that the new document is a clarification of existing policies whose effects will be minimal, as little research is going on in the territories. But to the Israeli government, the issue is bigger than that. "We will not accept any outside diktat about our borders," Prime Minister Benjamin Netanyahu said last month .
At stake isn't just grant money, but also "the contacts, the networks, the recognition," says Nobel laureate Ada Yonath, a crystallographer at the Weizmann Institute of Science in Rehovot who last year bagged a €2.5 million grant from the European Research Council (ERC) , funded by Horizon 2020’s predecessor, Framework Programme 7 (FP7). "Israel will be in a ghetto," she says. Israel's withdrawal would be "catastrophic for Israeli scientists and a big loss for Europe," adds ERC President Helga Nowotny.
Since 1996, Israel has taken part in E.U. research programs as an "associated country"—a status that allows a non-E.U. country to benefit from the European Union's funding bonanzas in return for a fixed contribution based on gross domestic product. Israel paid €534 million into FP7, which spanned 2007 to 2013; in return, almost 1600 Israeli scientists will have received a total of €634 million in funding. They fared particularly well in the battle for ERC grants; on a per capita basis, Israel was bested only by Switzerland, also an associated country.
European Commission spokesperson Michael Jennings says that the European Union banned funding for organizations established in the occupied territories all along, although it did not explicitly rule out supporting any research there. The only currently funded research that would no longer be eligible for E.U. grants is being done by a company called AHAVA Dead Sea Laboratories , which produces skin care products from Dead Sea mud and salt at a West Bank facility.
Still, at the Tel Aviv meeting last week, Israeli representatives told a delegation from the European Commission that without "positive understandings on the guidelines’ implementation … Israel will be unable to join the European R&D program," according to an Israeli government statement . "If Israel is going to lose a few dollars, or euros, rather than accepting [the European Union] damaging national security interests, then we don't have a choice," says Paul Hirschson, a spokesperson for the Israeli Ministry of Foreign Affairs.
Other international funding schemes also exclude projects in the occupied territories, including the United States-Israel Binational Science Foundation , which has funded dozens of Nobel laureates, and a similar foundation aimed at fostering scientific friendships between Israel and Germany . Hirschson could not say whether those foundations are problematic as well. He says Israel also takes issue with the timing of the E.U. guidelines, just as U.S. Secretary of State John Kerry had launched a new round of peace talks between Israel and Palestine. "They give the Palestinians the false sense that they can achieve anything without making any compromises," he says.
Not everyone is so gloomy about the damage a withdrawal from Horizon 2020 would cause. If Israel invests its contribution in domestic research instead, "it doesn't have to be such a tragedy," says Alex Lubotzky, a mathematician at Hebrew University of Jerusalem who co-founded a West Bank settlement called Efrat. Lubotzky, himself an ERC grant winner, adds that the European Union has every right to determine what is done with its money.
It's hard to predict whether either side will budge, says Jonathan Rosenhead, a professor emeritus at the London School of Economics and Political Science. He urges the European Commission to stick to its position. "They have drawn a line in the sand. They would look stupid if they back down now," says Rosenhead, who chairs the British Committee for the Universities of Palestine , an academic group that opposes the Israeli occupation of Palestinian lands.
Israel, too, is likely to take a hard line, says Oded Beja, an environmental genomicist at the Technion-Israel Institute of Technology in Haifa who says that his €2 million ERC grant helped him "enter the big league" of his field. "It's not that they want to move E.U. money into the occupied territories," Beja says. "But by agreeing, they admit that something is wrong with the territories."