BRUSSELS, Belgium -- On January 1, the European Union could punish a Middle East country with sanctions. No, it's not over nuclear weapons in Iran; the E.U.'s target is Israel.
New economic guidelines would prohibit money going from E.U. member nations to Israeli communities beyond what's called the green line, also known as the West Bank.
In order to receive funding, a private Israeli entity must prove it has no ties to the West Bank (Judea and Samaria), the Golan Heights and east Jerusalem. The economic impact could run into the millions.
Some believe the move is part of a growing anti-Semitism moving across Europe.
Those new E.U. guidelines are being established here in Brussels, Belgium, at the European parliament. They represent a major economic challenge to Israel and could predetermine the borders of a future Palestinian state.
Tomas Sandell, with the European Coalition for Israel told CBN News these guidelines "basically restrict any type of cooperation, financial cooperation between Europe and these disputed territories."
"And it's more complicated than you would think because even if you would have one particular university wanting to engage in a multi-million program with the E.U., if you happen to have one professor say living in east Jerusalem it would be impossible with these new guidelines," Sandell explained.
Andrew Tucker, executive director of Christians for Israel International says the guidelines put Europe in the position of creating a Jew-free state."
"But I think the thing that concerns us most is the signal that it's giving," Tucker told CBN News. "And we're concerned that Europe is on the slippery slope toward forcing the creation of a Palestinian state and it will be a Palestinian state where Jews will not be welcome."
Tucker and others feel this "slippery slope" would pressure Israel to create a future Palestinian state based on the so-called 1967 borders, divide Jerusalem and make it illegal for Jews to live there.
"There's nothing in the guidelines to say that Jews are not allowed to live in a new Palestinian state but we would see it as part of a broader project whereby Europe is saying all Israeli settlements are illegal, which means any Jew living in so called eastern Jerusalem -- and you know it better than I do -- this is heart of Jewish Jerusalem, Judea and Samaria -- is illegal," Tucker told CBN News. "Once you buy into that, then it's a question of taking and implementing administrative steps to make it a reality and the guidelines is just one example."
Israel and the E.U. did sign an economic agreement recently called "Horizon 2020," but the financial restrictions remain in place for the disputed territories. Israel's representative to the European Union feels that hurts both Israelis and Palestinians.
David Saranga, head of the E.U.'s Parliament Liaison Department, said it will also hurt Palestinian residents.
"At the end of the day, we're talking about the territories behind the 67 borders. It means settlements, but it also means Palestinians living around these settlements are not going to benefit."
It reminds Sandell of the anti-Semitism spawned in Europe during the 1930s.
"For me this is anti-Semitism 2.0. It's more sophisticated, but it's very effective in terms of demonizing Jews, demonizing the Jewish state and making life difficult in particular for those who would want to live in these disputed territories," Sandell said. "I know many people will be upset for hearing me saying this, but I do see similarities. Then they simply said 'don't buy from Jews.' Today, it's boycott Israel."