Elkin: We want dialogue with the Europeans, but if the terms stand, we won’t be able to agree.

Israel appealed to the European Union on Friday to rethink plans to withhold funds from Israeli organizations over the Green Line, a shift in tone from earlier recrimination and retaliation.

Under guidelines adopted by the executive European Commission in June, Israeli entities operating in the West Bank and east Jerusalem will not be eligible for EU grants, prizes or loans starting next year.

The government responded on July 26 by announcing curbs on EU aid projects for thousands of West Bank Palestinians.

On Thursday, it accused the Europeans of harming Israeli-Palestinian peace efforts and said it would not sign deals with the 28-nation bloc given the planned EU cuts.

But Deputy Foreign Minister Ze’ev Elkin took a more diplomatic tack on Friday, offering to negotiate with the European Union over the guidelines, which he described as a challenge to the Jewish state’s sovereignty.

“We are ready to hold a creative dialogue with the Europeans. We understand their position. We reject it, we don’t like it, but it’s their right when it comes to using their money,” Elkin told Israel Radio.

“We are asking the Europeans also to take into consideration the legal and other problems this creates on the Israeli side. We want to return and are ready to negotiate. But if the terms are the way they are today – unprecedented and several steps beyond anything heretofore – then we won’t be able to do it.”

EU foreign policy chief Catherine Ashton’s spokesman Michael Mann said Brussels was willing to clarify the new guidelines in talks with Israel.

“We stand ready to organize discussions during which such clarifications can be provided and look forward to continued successful EU-Israel cooperation, including in the area of scientific cooperation,” Mann told Reuters.

Another EU official said the first round of those talks would take place on Wednesday in Tel Aviv. They will focus on Horizon 2020, a prestigious 80 billion euro ($107b.) research program in which Israel had been expected to continue to participate, contributing funding while receiving grants in return.

The row with Brussels has stirred worry among Israeli scientists and academics that they could be cut from the program.

Elkin echoed their concern, but said the potential loss was in terms of research achievements, rather than money.

“The financial aspect is certainly not billions of euros. It’s not even 1b.,” he said, adding that past Israeli contributions to such projects had made them profitable, with “returns of around 1.3 euros for every euro invested.”

Elkin said the EU guidelines required Israel to take action against its own institutes with facilities in east Jerusalem.

“The dispute here is about Jerusalem and the dispute is over the question over whether the sovereign border that we laid down is in force or not,” he said. “If you begin to discriminate among various bodies located within your sovereign territory, it means you are effectively denying the sovereignty you declared.”