Israeli War Minister Moshe Yaalon had given instructions to Israeli officials to "freeze contacts with European Union representatives in Area C" of the West Bank, which is under full Israeli control, one official said.

"It's inconceivable the EU acts the way it does and we would just accept it," he said.

Published last week, the EU guidelines exclude all entities in territories occupied by Israeli regime after the Six-Day War in 1967 -- the Golan Heights, east Al-Quds and the West Bank -- from financial cooperation agreements with the bloc.

The move raised a storm in Israel and was denounced by Prime Minister Benjamin Netanyahu as "an external diktat about our borders," an issue that "will be decided upon only in direct negotiations between the sides".

A spokesman for Netanyahu declined to tell whether Yaalon's move reflected a broader Israeli stance on relations with the EU.

A war ministry official told AFP that meetings between Israeli regime officials and EU representatives were cancelled, projects and donations frozen, and requests to renew permits granted to EU officials and Palestinians for travel in the West Bank and to Gaza were rejected.

A spokeswoman for EU foreign policy chief Catherine Ashton said they were "concerned over these reports, but we have not received any official communication from the Israeli authorities".

"What we are doing right now is, through our delegation on the ground, trying to get urgent clarification," Maja Kocijancic said.

NJF/NJF