The proposal, however, does not yet have enough backing from EU member states to be enforced. Still, the idea itself marks a major shift in Europe’s stance toward Israel.

EU foreign policy chief Kaja Kallas went further, suggesting sanctions against two hardline Israeli ministers along with violent settlers and senior members of Hamas.

The ministers facing possible sanctions are Israel’s far-right National Security Minister Itamar Ben-Gvir and Finance Minister Bezalel Smotrich, according to EU officials.

European leaders are increasingly under pressure as Israel’s nearly two-year offensive in Gaza has worsened the humanitarian crisis, forcing the EU to consider tougher action.

The European Union is Israel s biggest trading partner, with trade in goods between the two amounting to 42.6 billion euros last year, according to the EU, Reuters reported.

If the free-trade arrangement is suspended, Israel would face duties at the same level as other countries without a trade accord with the bloc.

In Israel s case, that would affect exports worth approximately 5.8 billion euros, resulting in an estimated 227 million euros a year in duties, a senior Commission official told reporters.

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Israeli Foreign Minister Gideon Saar said on X that the European proposals are "morally and politically distorted, and it is to be hoped that they will not be adopted".

The suspension of free-trade arrangements, first floated, opens new tab by European Commission President Ursula von der Leyen last week, would require the support of a qualified majority of EU governments - 15 out of 27 EU members representing 65% of the EU population.

EU diplomats told Reuters that it is unlikely that the proposal would get the necessary support, with much depending on Germany, which has so far been reluctant to impose EU penalties on Israel.

GERMANY NOT REACHED A FINAL VIEW ON PROPOSALS

A German government spokesperson said on Wednesday it has not yet formed a final view on the EU proposals and Germany wants to keep the channels of communication with Israel open.

Diplomats say the proposed measures against the Israeli ministers are also unlikely to pass as they require unanimous support from EU members.

Kallas said that although public opinion has been shifting due to suffering in Gaza, she believes "the political lines are very much in the place where they have been so far".

But the proposals mark a political shift in the EU’s relationship with Israel.

The Commission is also putting its bilateral support for Israel on hold, without affecting work with Israeli civil society and Yad Vashem, Israel s main Holocaust memorial centre.

Hamas militants attacked Israel in October 2023, killing about 1,200 people and taking 251 hostages, Israeli tallies show. Israel s military assault against Hamas has killed over 64,000 Palestinians, Gaza s health ministry says.