Israeli Defence Minister Moshe Yaalon has instructed the army to freeze several European-funded projects in the West Bank and Gaza, Israel radio reported on Friday. The decision comes in retaliation for last week’s EU directive banning funding or grants for bodies with links to Israeli settlements. The Israeli move affects all projects requiring permits from the Civil Administration, which in charge of Area C, the 60 percent of the West Bank under full Israeli control; access of EU diplomats and representatives to Area C and Gaza; and joint meetings. In addition to freezing the EU-funded projects, no permits have been issued to EU humanitarian aid workers to enter Gaza for several days, according to a western diplomatic source. The European directive bans any funding, cooperation, awarding of scholarships, research funds or prizes to anyone residing in illegal settlements or in East Jerusalem. The regulation, which went into effect on Friday, requires that any agreement or contract signed by an EU country with Israel include a clause stating that the settlements are not part of the State of Israel and therefore are not part of the agreement. The new EU guidelines were immediately denounced by Israeli officials, with Israeli Prime Minister Benjamin Netanyahu saying he would not accept any instructions forced upon his government from abroad.