The new work permits will allow Israeli companies to hire additional Arab workers, especially in the construction and agriculture sectors, providing much needed employment for Palestinians in the West Bank.

“While we take a step that will help the Palestinian economy, they continue to call for a total boycott of settlement goods and industry – something that hurts them since they are employed in that industry – and are behind the calls in Europe for stiffer economic sanctions against settlements,” an Israeli source quoted by The Jerusalem Post said.

Israel’s decision came on the eve of a visit by an EU senior diplomat who is to provide the Israeli authorities with clarifications on the implementation of new EU guidelines banning Israeli entities located beyond the Green Line from EU funding.

At a meeting with EU Foreign Ministers in Vilnius, last Saturday, US Secretary of State John Kerry urged the EU to postpone any action on the guidelines while Israeli-Palestinian peace talks were under way.