EU Ambassador Warns Israel of Consequences if Peace Talks Fail and Settlement Building Continues

Says Israel could become economically isolated


JERUSALEM — The European Union's ambassador to Israel says a burgeoning movement to sanction Israel over its construction of West Bank settlements will gain steam if the current round of Mideast peace talks fails.

A small but growing number of European businesses and pension funds have begun to drop investments or limit trade with Israeli firms involved in the West Bank settlements.