LONDON, Dec. 23 (JTA) — Europe and Israel appear to be on a collision course as the old year fades and Britain prepares to assume the presidency of the European Union on Jan. 1. Signs of impending danger for Israel appeared earlier this month with the publication of the Luxembourg Declaration, a wide-ranging document that outlined the worldview of the European heads of government and singled out Israel in an 18-point statement on the Middle East peace process. The danger increased when Britain proclaimed that the flagging Middle East peace process would top its agenda during the six-month period of its presidency. The latest developments raise the question: Why has the European Union in general — and Britain in particular — chosen this moment to ignore Israel’s demand for reciprocity as the basis for making progress with the Palestinians? Why deliver a public humiliation and antagonize Israel at this point in the peace process? According to some analysts, the Europeans are firing American bullets at a time when the Clinton administration wants to see the heat turned up on Israel. The European leaders pronounced themselves “deeply concerned by the lack of progress” in Israeli-Palestinian negotiations. Pointing an accusing finger at Israel, their declaration pledged the 15-nation European Union to: * Enhance its support to Palestinian institutions in eastern Jerusalem; * Continue to monitor developments on human rights, Jerusalem and settlements; and * Offer “specific suggestions” on final-status issues, such as “possible Palestinian statehood, borders/security arrangements, settlements, refugees, Jerusalem and water issues.” It stressed the great urgency for the parties to live up to previous commitments, “especially as regards credible and serious redeployments.” And, in another not-so-subtle dig at Israel, it emphasized the importance of avoiding “counterproductive unilateral actions, for instance on settlements and Jerusalem.” The European Union, it added, would “use all its political and moral weight to ensure that all the provisions in the agreements already reached are fully implemented.” Israel hit back, accusing the European Union of adopting a meddling, one-sided approach that disqualified it from playing a constructive role in the peace process. Using unusually tough and undiplomatic language, the Israeli Foreign Ministry issued a statement saying it viewed the declaration “with the utmost gravity” and charged that it was “notable for its lack of balance.” “This declaration was adopted at a time when Israel is in the midst of crucial deliberations toward the adoption of decisions of critical importance for the continuation of the peace process,” said the statement. The statement said the Luxembourg Declaration was markedly different from “the constructive and objective approach of the United States,” adding that by issuing the declaration, “Europe disqualifies itself from playing a positive role in the process.” The British government soon upped the ante by threatening economic reprisals. A senior British government official, noting the European potential for applying “economic leverage,” said Britain would “ensure that the European Union has political influence on the peace process which reflects our economic weight in the region.” Threatening to pressure the parties to get the peace process back on track, the official said, “I would caution any country not to deny the European Union a role.” The theme was picked up by British Foreign Secretary Robin Cook when he met Yasser Arafat in London late last week after the Palestinian Authority leader’s meeting with U.S. Secretary of State Madeleine Albright. Describing his meeting with Arafat as “a very good, honest and open exchange of views,” Cook assailed Israel, expressing impatience that “so much difficulty had been created by unilateral gestures on the part of one side to the talks.” “We are very anxious to see restraint on future settlement developments and progress on a realistic further redeployment of Israeli troops,” he said. By going on the assault, Europe is saying things that Washington feels constrained from saying publicly. Its leaders are deliberately increasing Israel’s isolation in order to ratchet up the pressure on Prime Minister Benjamin Netanyahu to make him amenable to more subtle pressure when he meets with President Clinton in Washington next month. Washington is also increasingly anxious about its eroding image in the Arab world and must be hoping that an overtly tough line with Israel, albeit via proxies, may result in greater Israeli flexibility — and this in turn will restore some of Washington’s lost credibility. Recent weeks have provided the Clinton administration with much food for thought: * It expended considerable diplomatic prestige on last month’s Middle East and North Africa economic conference in the Persian Gulf state of Qatar — a meeting many considered a failure; * Washington was unable to muster an Arab coalition for another bout of hostilities with Iraq’s Saddam Hussein; * It has witnessed a growing rapprochement between some Arab states with Iran; and * Not least, Washington is concerned about the burgeoning influence of Moscow, which brokered the deal that defused the recent Iraqi crisis and permitted U.N. weapons inspectors to return to Baghdad. Russia is also continuing to supply assistance for Iran’s nuclear program, rebuild the Syrian military and score valuable points at American expense in the Arab world while picking up the old Soviet allies in the region. Britain alone has closely supported Washington’s lead on most Middle East issues, particularly Iraq and the peace process, and officials in London insist that while they seek a political role for the European Union in the peace process, their activities will complement — not compete with — Washington’s efforts. In the evolving new power play, it is increasingly obvious that Britain is playing bad cop to Washington’s good cop. But this is a high-risk game for Washington. It may win short-term points by pressuring Israel. But in the long term, it could lose the respect of an Arab world that will be profoundly unimpressed by its perception that the United States is prepared to go to the mat with its closest and most loyal regional ally. It is also a dangerous game for Israel. When the anger in Jerusalem is replaced by a cool, rational assessment, Netanyahu will not find it easy to simply dismiss the views of the European Union — which does, after all, constitute Israel’s largest export market.