JERUSALEM, Israel -- Israel rejected the European Union's addition of Modiin -- located about halfway between Jerusalem and Tel Aviv -- on its list of global imports ineligible for tax breaks.
Modiin, a central Israeli city that merged with Maccabim and Reut, has a population of more than 80,000.
The E.U. says it will not recognize Israeli products produced beyond the 1949 armistice line (the so-called green line) as made in Israel, making them ineligible for duty-free status under the 1995 E.U.-Israel Free Trade Agreement.
"This decision is a mistake that does not correlate with the facts of the ground," Modiin Mayor Chaim Bibas said. "Modiin-Maccabim-Reut is an indivisible part of the State of Israel," he said, inviting EU representatives to visit the city so they would "understand their mistake."
Ramzi Gabby, chairman of Israel Export and International Cooperation Institute, told Globes "the government should make every effort to remove this from the agenda to prevent creating a precedent."
Israel's Foreign Ministry issued a statement in response to the E.U. customs list of non-eligible locations.
"There is not the slightest doubt that the Modi'in, Maccabim and Re'ut localities are an integral part of Israel. The EU ignores reality when it extends the domain of conflict to places and issues that do not belong there," the Foreign Ministry spokesman said in a statement released on Wednesday.
"For anyone who deals in reality, there is not the slightest doubt that the Modi'in, Maccabim and Re'ut localities are an integral part of Israel, and their future is not in question," the statement concluded.
The E.U.'s latest move follows last month's approval of 60 new "cooperation activities" with Israel in fields such as transport, energy and environment.
Palestinian Authority official Hanan Ashrawi criticized the E.U. at the time for strengthening ties with Israel.
"Rather than rewarding Israel by giving it preferential treatment, the E.U. should use its economic influence to end Israel's illegal occupation of Palestine [sic]," Ashrawi said.