An internal European Union document obtained by Reuters this week accuses Israel of illegally taking over the eastern half of Jerusalem and then discriminating against its Arab residents.
The document, which is dated December 15 of last year, says that Israel has accelerated its "illegal annexation" of Jerusalem in order to keep the city united under Israeli sovereignty as part of any peace settlement.
News of the document came just days after visiting US Secretary of State Hillary Clinton indicated that the Obama Administration also does not recognize Israel's sovereignty over the eastern half of Jerusalem.
During a press conference with Palestinian leader Mahmoud Abbas in Ramallah last Wednesday, Clinton blasted the Jerusalem municipality for daring to act against illegal Arab construction in the Israeli capital.
The European document also claimed that Israel practices systematic discrimination against Jerusalem's Arab population by not letting them build wherever and whenever they please, and by subjecting them to security checks.
The report failed to note that Arab residents of Jerusalem have carried out a number of bloody terrorist attacks against the city's Jewish residents over the past year.
An Israeli government source told Ha'aretz that the grumbling from Europe has been accompanied by increasing pressure from the Obama Administration over plans to build more Jewish homes on lands claimed by the Palestinians.
The source said that Israel has received four messages from Washington over the past month demanding explanations for plans to build more homes in the Judean towns of Ma'aleh Adumim and Efrat and a decision to solve the problem of one so-called "illegal" settlement by moving it within the municipal boundaries of an officially authorized settlement.