Europe threatens Israel with sanctions

The European Union is preparing billion-dollar sanctions against Israel if Ariel Sharon continues to defy international opinion and reject calls for an end to his invasion of the Palestinian territories.

European governments appear prepared to turn to economic weapons after the Israeli Prime Minister defied President Bush's call at the weekend for a withdrawal "without delay". Mr Sharon pledged only that the offensive would be accelerated, not ended.

Josep Pique, the Spanish Foreign Minister, revealed yesterday that European foreign ministers had discussed sanctions at emergency talks in Luxembourg last week and would discuss punitive measures at their next meeting.

"It is a possible scenario ... Some countries are in favour of introducing sanctions very, very soon; others are more reluctant. So we have to discuss it," Mr Pique said.

Louis Michel, the Belgian Foreign Minister, said the EU might rethink trade ties with Israel. The EU has donated millions of pounds of aid to the Palestinian Authority only to see infrastructure, such as the new airstrip in Gaza, destroyed by Israeli troops.