Alarm bells were going off in European Union capitals when on Dec. 7 the Israeli Knesset passed, at a first hearing, the settlement regularization bill, which legalizes illegal Israeli settlements built on private Palestinian lands.

Last week, EU foreign ministers, mainly from Germany, France and the United Kingdom, as well as EU senior officials held internal consultations over the significance of this Israeli right-wing coalition move. According to an associate of Federica Mogherini, the EU’s high representative for Foreign Affairs and Security Policy, European leadership does not consider this development to be a simple tactical maneuver by Prime Minister Benjamin Netanyahu to protect the stability of his coalition. Rather, they see it as an intentional policy move instigated by Netanyahu and Education Minister Naftali Bennett — a dangerous expression of a possible de jure annexation of West Bank lands by the Israeli government. The bill may or may not pass the test of the Israeli judiciary, but Netanyahu’s decision to bring it up to a vote (imposing on all his coalition members to back it) is a clear declaration of intent targeting the half a million Israeli settlers in the territories. Netanyahu signals that as far as he is concerned, most of the West Bank will remain in Israeli hands.

The prevailing belief in EU headquarters is that the Israeli High Court decision forcing Netanyahu to evacuate the Amona outpost by Dec. 25 actually served the prime minister as an excuse to launch a more formal annexation strategy. The source explained that in effect such a policy of annexation has been taking place ever since Netanyahu’s current right-wing coalition rose to power. It is expressed in the form of Israeli economic expansion in the Israeli-controlled West Bank Area C (60% of the West Bank).

According to the official, the EU is now informally exploring among its main members what policy measures to take in case the regularization bill does come into effect.