"Israel outraged over new rules for EU financial aid,"leads German daily Frankfurter Allgemeine Zeitung.

According to a measure to be published in the Official Journal of the EU on July 19, future agreements between the EU and Israel will contain a clause banning the use of aid from the European Commission for Israeli projects in the West Bank, in East Jerusalem (the Arab section of the city) or in the Golan Heights.

These guidelines were adopted on June 30 by the Commission. They state that, in the period between 2014 and 2020, scholarships, grants and other financial aid cannot be awarded to Israeli entities operating in the Occupied Territories.

"Never before has the Commission so clearly drawn a difference between Israel and the Occupied Territories," says Frankfurter Allgemeine Zeitung.

The Israeli government called the decision a "great mistake" which disqualifies the EU from playing the role of mediator in the peace process.

But for The Jerusalem Post, Israel is failing to heed the growing anger at Israeli settlements in the disputed territories –

The constant drumbeat of anti-settlement pronouncements coming from Europe has deafened Israel to the anti-settlement mood that exists in many EU capitals. This sentiment is not necessarily felt by everyone, everywhere in Europe. But those who do feel it are very passionate about it, and they are very verbal. And it is their passion that is driving EU governments – no less sensitive to public opinion than Israeli leaders are to their own – to take steps they have refrained from taking in the past.