Shaping Discourse and Setting Examples: Normative Power Europe Can Work in the Israeli–Palestinian Conflict

The conventional wisdom in the literature on EU&#8211;Israel/Palestine relations is that the EU has only displayed very limited, if any, normative power in the Israeli&#8211;Palestinian conflict. Previous studies have focused on the ability, or rather inability, of the EU to diffuse any of the core norms behind Ian Manners' concept of &#8216;Normative Power Europe&#8217; (NPE) into the Israeli&#8211;Palestinian conflict, while tending to ignore the ability of the EU to shape what is considered normal in many aspects of the conflict &#8211; either by making others adopt its policies, or by contributing to creating consensus around an issue. By using Tuomas Forsberg's framework of four different mechanisms of normative power: persuasion, invoking norms, shaping the discourse and the power of example on three important case studies from the conflict (EC/EU's declaratory diplomacy on the need for a just peace in the conflict, the Palestinians' bid for statehood at the UN in 2011 and the emerging &#8216;differentiation strategy&#8217;), this article concludes that the EU has much more normative power in the Israeli&#8211;Palestinian conflict than the literature has previously acknowledged.

Despite, admittedly, its many failures in the conflict, the EU is, at the same time, widely recognized in the academic EU literature and elsewhere for its important normative work in legitimizing a just peace in the conflict over several decades (See, for example, Ginsberg, 2001, p. 106;Keukeleire and MacNaughtan, 2008, p. 256;Persson, 2015, p. 91). It is important to note, however, that this work is rarely seen through the lens of NPE in the EU literature, which it will be in this article. In addition, this article's focus will be on two more recent case studies from the conflict where the EU has displayed clear normative power: the Palestinians' bid for statehood at the UN in 2011 and the new EU-led strategy of separating the democratic and internationallyrecognized Israel within the 1967 borders from the non-recognized settlements in the West Bank, increasingly referred to by academics and other political observers as 'the differentiation strategy' (See, for example, Levy, 2015;Lovatt and Toaldo, 2015).
The three main arguments advanced in the article are that the EU has indeed significant normative justification at its disposal in some aspects of the conflict; that both the Israeli government and the Palestinian Authority have attached significant value to the EU's normative power in these three cases and that other third partiesfrom the US government to local NGOshave been influenced by the EU's normative power. Regarding the last argument, it is important to note that I am not making a direct causal argument here; that third parties do what they do in the conflict only because of NPE without other factors contributing. Rather, as Gordon and Pardo (2015b, p. 423) have noted, NPE can serve as a way of encouraging and legitimizing the actions of third parties in the conflict. Normative power is also obviously not the primary tool for the more military aspects of the conflict, such as upholding a cease-fire or protecting borders. But as the case studies in this article will demonstrate, in situations where Israel and the Palestinians actively seek or otherwise need international political support for their respective strategies, the ability of the EU to diffuse norms, set examples and shape what is seen as normal in world politics, in other words its normative power, becomes very important.

I. Being and Having Normative Power in World Politics
The notion of the EU as having normative power can often be traced back to François Duchêne who argued in the early 1970s that Europe was a different kind of power in world politics, relying on political and economic means rather than on military ones. Duchêne's (1973, p. 19) notion of Europe as a civilian power was developed by Manners (2002) three decades later in his seminal article on Normative Power Europe (NPE). In between Duchêne and Manners, Richard Rosecrance (1998, p. 22) noted in the late 1990s that 'Europe's attainment is normative rather than empirical. Its attractive force is very great, and others will seek to be associated with it'.
According to Manners (2008, p. 45), 'The EU has been, is and always will be a normative power in world politics'. As such it is different from other pre-existing political systems (Manners, 2002, p. 242). The EU is, according to Manners (2002, p. 252), constructed on a normative basis that predisposes it to act in a normative way in world politics. In his 2002 article on NPE, Manners defined normative power as 'the ability to define what passes as "normal" in world politics' (Manners, 2002, p. 236). Manners also argued that the Union had gradually developed a normative framework based on certain values that it tries to promote in its foreign policies. He identified five such core norms: peace, liberty, democracy, human rights and the rule of law (Manners, 2002, p. 242). 1 Manners' understanding of power is very much in line with constructivism in that he argues that 'the ability to define what passes for "normal" in world politics is, ultimately, the greatest power of all' (Manners, 2002, p. 253). Liberal notions of attraction certainly play a role here, but the key issue is socialization, or the adoption of norms, as several scholars have correctly noted in their respective works (see, for example Björkdahl et al., 2015, p. 2;De Zutter, 2010, p. 1114Manners, 2009a, p. 13).
On the one hand, a central claim in the literature is that NPE is about the power of the ideas themselves without direct links to material resources (Aggestam, 2009, pp. 29-31). Manners argues that normative power should be about normative justification rather than the use of material incentives, and that it is located in a discussion of the 'power over opinion' (Manners, 2002, p. 239). On the other hand, as Lisbeth Aggestam (2009, p. 29) has noted, Manners opens the door to the possibility that in practical terms, normative power is frequently used together with material incentives and/or physical force (Manners, 2009a, p. 10; see also Larsen, 2013, p. 908). This might, unintentionally, give NPE a more realist basis the more it is connected to 'carrot and stickism'.
While NPE in its various shapes and forms (sometimes referred to as 'Ethical Power Europe' and other similar terms) is a term used mostly in the academic EU literature, it is clearly connected to, but not the same as the more policy-relevant idea of the EU as a force for good in world politics (Aggestam, 2008, p. 1;Bicchi, 2006, p. 299;Niemann and De Wekker, 2010, p. 4, see also Treaty of Lisbon, 2007, Article 1, 26). Many have taken issue with Manners, either because they have rejected the idea of NPE completely or because they have been quick to stress the challenges and paradoxes associated with being a normative power in world politics (see, for example, Hettne and Söderbaum, 2005, p. 551;Hyde-Price 2008, p. 29;Merlingen and Ostrauskaite, 2006, p. 142).
Between the political realists and the critical theorists are critics who argue that NPE has more to do with internal than external policies, and more to do with the construction of the EU's self-image than with the projection of particular norms (Diez, 2005, p. 613;Diez and Pace, 2011, p. 210;Sjursen, 2006a, p. 235). In the literature on political legitimacy, it is well known that self-justification in moral terms is important for most actors in world politics (see, for example, Alagappa, 1995, p. 4). There have, indeed, been several instances where the EC/EU has used its involvement in the Israeli-Arab conflict and later Israeli-Palestinian conflict for internal gain, to foster integration within, to state its presence and gain legitimacy in world politics. EC diplomacy after the 1973 war is perhaps the best example of this (Greilsammer and Weiler, 1984, p. 133;Persson, 2015, p. 73). At the same time, there has always been a genuine belief in the EC/EU that this is a serious conflict which needs to be resolved. This thinking was clearly reflected in the 2003 European Security Strategy, which stated that 'Resolution of the Arab/Israeli conflict is a strategic priority for Europe. Without this, there will be little chance of dealing with other problems in the Middle East' (European Security Strategy, 2003, p. 8).

II. NPE in the Eyes of Others outside the EU
Since one of the key issues for NPE is socialization or norm adoption, it is a bit surprising that the NPE literature and the literature on the external perceptions of the EU have not been more closely connected. Henrik Larsen (2013, p. 901) has, for example, noted that 'there is no in-depth treatment of how the external perceptions findings contribute to the literature on normative power more broadly'. This is indeed surprising since there is a clear consensus in the literature that external perceptions of the EU do indeed matter and are even critical for adopting norms or other ideas from the EU (see, for example, Diez and Pace, 2011, p. 223;Larsen, 2013, p. 896;Pardo, 2015, p. xvii;Whitman, 2013, p. 186). Israeli scholars Pardo and Harpaz with their respective colleagues have begun to close this gap by connecting NPE to Israeli perceptions of the EU. Their main conclusions, some of which this article will disagree with, are that there is no evidence of Manners' five core norms being diffused (Gordon and Pardo, 2015a, p. 266;Pardo, 2015, p. 99), that the EU suffers from a legitimacy deficit vis-à-vis Israel, which affects its normative power negatively (Harpaz and Shamis, 2010, p. 580), that the EU is high on rhetoric and low on delivery (Harpaz and Shamis, 2010, p. 604, see also Tocci, 2009, p. 387), that the normative sphere is cut off from the economic sphere (Gordon and Pardo, 2015a, p. 271) and that the EU's normative power is determined to a certain extent by the resistance that it encounters (Gordon and Pardo, 2015b, p. 417).
On the Palestinian side, there is considerably less research on Palestinian perceptions of NPE than on the Israeli. The general view of Palestinians vis-à-vis the EU has long been that the EU is considered to be more favourable to the Palestinian negotiating position than the US, but that it has a marginal political role to play in the conflict, besides its generous economic assistance to the Palestinians (Santoro and Nasrallah, 2007, p. 87-92). Michelle Pace has detailed the EU's limited normative power vis-à-vis the Palestinians, especially concerning democracy promotion and the treatment of Hamas (2010, p. 610; Diez and Pace, 2011, p. 220). Daniela Huber (2011, p. 1) has reached similar conclusions. It should be mentioned, however, that the EU's boycott of Hamas in some way is a case of NPE, as it significantly contributed to normalizing a policy of non-recognition by the international community vis-à-vis the group, even if it had devastating effects on the situation in Gaza and in the Palestinian society more generally.

III. Operationalizing NPE as a Framework of Analysis
While it seems clear, as Sjursen (2006b, p. 170) and others have noted, that NPE has become a fruitful avenue for research, which has moved the research agenda forward, a common point of criticism against NPE has been its vagueness, which according to the critics, makes it difficult to use analytically on empirical cases (see, for example, De Zutter, 2010, p. 1108; Lerch and Schwellnus, 2006, p. 305;Pace 2007Pace , p. 1060. It should be mentioned, however, that critics like Pace have, despite their criticism, themselves done important empirical work on NPE. In his 2002 article, Manners (2002, p. 244-245) distinguished six factors for diffusing EU norms: contagion, informational diffusion, procedural diffusion, transference, overt diffusion and cultural filter. In his later work, Manners (2009b, p. 786) developed a normative power method based on principles, actions and impact (see also Tocci, 2008). Building on Manners' work and the related debate, Tuomas Forsberg (2011Forsberg ( , p. 1196Forsberg ( -1197 has developed a perhaps less ambitious but more analytically clear framework consisting of four different mechanisms of normative power: persuasion, invoking norms, shaping the discourse and the power of example. Forsberg's framework will guide the analysis in this article. According to Forsberg (2011Forsberg ( , p. 1196Forsberg ( -1197, persuasion is about a direct form of power, which leads to changes. Invoking norms is about activating commitments, according to Forsberg, but I will focus more here on the diffusion and adoption of EU norms, which is more common in the NPE literature. Shaping the discourse is, in contrast to persuasion, a more indirect form of power. The power of example is about the idea that the EU has power when it simply stands as a model for others to follow.

IV. Case Selection
The three case studies have been chosen because they go against the conventional wisdom in the literature that the EU has displayed limited, if any, normative power in the Israeli-Palestinian conflict. Both Israeli, Palestinian and many European researchers tend to conceptualize NPE in the conflict mainly through the diffusion of Manners' five core norms, leading them to conclude, as Pardo (2015, p. 99) did in his most recent book, that 'there is very limited diffusion of European core norms and values to Israel'. However, such minimalistic definitions of NPE miss what is arguably the other half of the EU's normative power, namely its ability to shape what passes as normal in world politicswithout necessarily diffusing any of the core norms. This aspect of NPE in the Israeli-Palestinian conflict is something to which the previous research has paid insufficient attention. By not focusing on this conceptually, it is not surprising that the normalization aspect is missed empirically as well, even in the research by Pardo and Harpaz, which otherwise is very solid. While I generally agree with their position that the EU has been unable to diffuse its core norms into the conflict in a serious, deep-rooted way, in case study 3 there is a small, but clear example of the EU diffusing and Israel adopting the core NPE norm of rule of law.
The purpose of this article is to show that the EU has much more normative power in the Israeli-Palestinian conflict than the literature has previously acknowledged, but that it is best understood as a power to shape discourse or to stand as an example that others could follow, rather than the power to diffuse the core norms behind NPE. I am of course aware of the fact that there are other aspects of the conflict where the EU's normative power has had little or no effect at all. NPE has, for example, not been able to address the flagrant human rights violations that take place regularly in the conflict, or stopped settlement expansion, or rocket attacks against Israel. NPE has also, as critics like Pace (Diez and Pace, 2011, p. 222) have correctly noted, had a limited contribution to the EU's state-building efforts in the Palestinian territories. Finally, the three case studies examine both an Israeli and a Palestinian perspective on the EU's normative power in the conflict, whereas most of the previous research, often only has one of the side's perspective. Harpaz (2007;Harpaz and Shamis, 2010) and Pardo (2015;Pardo, 2015a, 2015b) have, naturally of course, analyzed NPE from an Israeli perspective, whereas Pace (2010, p. 611;Diez and Pace, 2011, p. 220) and Huber (2011, p. 1), analyzed mainly the Palestinian perspective of NPE.

V. Case Study 1: Discursively Developing a Just Peace in the Conflict 2
The two-state solution has a long history in the conflict, going back to the 1937 Peel Commission and the 1947 UN partition plan. In 1969, the Soviet Union adopted the 'Two States for Two Peoples' formula, which at the time had little effect on Israel, whose ruling doctrine after the 1967 war became the 'Jordanian Option' (Avnery, 2016). In its first official declaration on the Israeli-Palestinian conflict, which was then referred to as the wider Israeli-Arab conflict, the EC in 1971 called for a just peace in the conflict without even mentioning the Palestinians as a part of the conflict (Bulletin of the EC 6-1971, p. 31). Two years later, in 1973, after the October war and the subsequent oil crisis, the first discursive shift took place when the EC issued a new declaration, which now called for a just peace in the context of 'the legitimate rights of the Palestinians' (Bulletin of the EC 10-1973, p. 106). The reactions from Israel were furious. Israeli Foreign Minister Abba Eban responded that the declaration meant 'Oil for Europe' rather than 'Peace in the Middle East' (quoted in Greilsammer and Weiler, 1984, p. 135).
A second discursive shift took place in 1977 when the EC again called for a just peace in the context of referring to the Palestinians as a 'people' with a 'national identity' and a 'homeland'new factors that needed to be accounted for in the negotiations (Bulletin of the EC 6-1977, p. 62). A third discursive shift came in 1980 when the EC issued its seminal Venice Declaration, which called for Palestinian 'self-determination' and inclusion of the PLO in the negotiations (The Venice Declaration, 1980). In one of the earliest manifestations of NPE and of the EC/EU's ability to set an example and normalize its position in an important aspect of the conflict, Prime Minister Menachem Begin believed in 1980, according to Rory Miller (2011, p. 84), that there was 'nothing graver' than Europe's attempt to legitimize the PLO. Moreover, this example clearly shows the significant value that Israel attaches to NPE in this case. Israel's reaction to the Venice Declaration was again furious and the government explicitly compared the declaration to Hitler's Mein Kampf (The Israeli Cabinet statement on the Venice Declaration, June 15 1980). Prime Minister Begin called it 'a shame' and his Foreign Minister Yitzhak Shamir (who later succeeded him as PM) called it a 'scandal for Europe' (quoted in Miller, 2011, p. 92). Opposition leader Shimon Peres dismissed it as a 'piece of paper' that changed nothing on the ground (quoted in Miller, 2011, p. 92). A decade later, Peres personally led the Israeli government's efforts to legitimize the PLO, and in 1993, he signed the DOP (Declaration of Principles, also known as the Oslo Accords).

VI. Influencing American Positions on the Conflict
On the Palestinian/Arab side, reactions to the Venice Declaration were somewhat split, with the PLO clearly disappointed (Greilsammer and Weiler, 1987, p. 51) and Jordan's King Hussein strongly in favour (Garfinkle, 1983, p. 51). American administrations under both President Carter and Reagan favoured various forms of Palestinian rights as the EC had done since 1973, but none of them came close to endorsing anything like the Venice Declaration. The Financial Times commented after President Reagan issued his own peace plan in 1982 that the American administration was 'now moving some way towards the ideas contained in the EEC Venice declaration on the Middle East' (quoted in Greilsammer, 1988, p. 298). When the DOP was finally signed in 1993, more than a decade after the Venice Declaration was issued, it looked much closer to the Venice Declaration than anything the US had previously suggested. Both European leaders and many academics have long argued that the EC/EU and individual European countries played a key role in legitimizing the Palestinians, the PLO and its leader Arafat, on the international scene before the DOP were signed in 1993, which made it easier for the Americans and Israelis to open up an official dialogue with the group (see, for example, Keukeleire and MacNaughtan, 2008, p. 282;Miller, 2011, p. 134). According to Caroline Glick, one of the ideologues of the hard right in Israel, 'America's embrace of the policy in 1993 would never have happened without years of prior open and subversive European diplomacy, both in Israel and in the United States' (Glick, 2014). Indeed, one of the primary reasons why President Obama was so detested among the hard right in Israel was because he was perceived, in the words of Daniel Möckli (2009, p. 70) to be playing 'a European tune in his approach to the Arab-Israeli conflict'.

VII. Shaping the Discourse about the Need for a Two-State Solution
As Nathan Brown and others have noted, there was something unspeakable about a Palestinian state in the 1990s. For example, when Hillary Clinton mentioned the idea of a Palestinian state in 1998, the White House repudiated her and said it was not the government's policy (Brown, 2013). This began to change after a new discursive shift materialized in 1999 when the EU endorsed the idea of Palestinian statehood in the Berlin Declaration (The Berlin Declaration, 1999). The US did the same in 2001 (Bush, 2001). The Israeli government's reaction, now under Prime Minister Benjamin Netanyahu, to the Berlin Declaration was again to draw explicit parallels to the Holocaust (Netanyahu, 1999). The most recent discursive shift in the EU's conceptualization of a just peace in the conflict took place in 2009, again with massive Israeli protests, when it issued a declaration that called for East Jerusalem to be the capital in a future Palestinian state (Council of the European Union, 2009). A former Israeli ambassador to the EU, Oded Eran, told Israeli media after the 2009 declaration that the EU had often served as a bellwether for the rest of the international community, in that it was the first international actor to talk about Palestinian self-determination and statehood. 'Now, the EU is taking the lead on making East Jerusalem the Palestinian capital', Eran told The Jerusalem Report (quoted in Susser, 2010, p. 9). The Israeli ambassador to the EU at the time, Ran Curiel, told the same paper: 'If you look at the precedents, all those who are against any compromise in the city should be worried' (quoted in Susser, 2010, p. 9).
Revisiting the NPE literature and Forsberg's four mechanisms of normative power, there is no example in this case study of persuasion by the EU vis-à-vis either the Israeli or Palestinian side, but one can see the EC/EU decades-long promotion of its vision of just peace as diffusion of NPE's norm of peace. Israel has, very reluctantly, adopted ideas such as self-determination for the Palestinians and Prime Minister Netanyahu is, at least rhetorically, in favour of some form of Palestinian state. As this case study shows, there are many examples where the EC/EU did shape the discourse and acted as an example for others, not least the Americans, to follow, clearly suggesting an underestimated role for NPE in influencing the attitudes and behaviour of third parties in the conflict. If NPE should, as Gordon and Pardo (2015b, p. 417) have suggested, be partially determined by the resistance that it encounters, this case study points to clear normative power in this regard.

VIII. Case Study 2: The 2011 Palestinian Bid for UN Membership
In 2010-11, when it became clear that the Palestinians were planning to seek recognition at the UN for a Palestinian state, the EU and its Member States quickly emerged as the crucial battlefields for whether the bid would succeed or not. Both the Israeli and Palestinian leaderships openly declared that they would measure the outcome by the stance adopted by the EU members. Some Palestinians even implied that they were only interested in a resolution enjoying EU support (International Crisis Group, 2011, p. 32). In a clear acknowledgment of the EU's normative power, an Israeli official told the International Crisis Group in August 2011, a month before the Palestinians were to submit their application to the UN that: Europe is vital because Europe is the key to international legitimacy. The US is the key to the effective exercise of power, but the US cannot confer legitimacy. The Europeans alone can do that (quoted in International Crisis Group, 2011, p. 30).
In the same report, a Palestinian Authority official said it 'is critical for us to have as widespread backing as possible from European countries. Without that, a UNGA vote will look like a defeat' (quoted in International Crisis Group, 2011, p. 32). The EU has, arguably, never before in its over four decades-long involvement in the Israeli-Palestinian conflict been in such a pivotal position. The International Crisis Group (2011, p. 32) called it 'Europe's moment', a chance for the EU to really use its normative power as leverage in the conflict. The think tank European Council on Foreign Relations (Levy and Witney, 2011, p. 1) called the 27 EU votes the 'key diplomatic prize'. Many other states in the world, especially other democracies, look closely at how the EU members speak, act and vote in various international forums regarding the Israeli-Palestinian conflict. As Dore Gold, a former Israeli ambassador to the UN, wrote in an op-ed in Israel Hayom: From personal experience, when many non-European ambassadors were asked how they were voting in the General Assembly on a controversial draft resolution on the Israeli-Palestinian conflict, they would say that they would follow the European leadthis was true for diverse countries from Argentina to Japan (Gold, 2012). This group of countries, the 27 EU members plus the other liberal democracies, has many names in the political debate in Israel. PM Netanyahu has called them the 'critical minority' (quoted in Keinon, 2011). Others have called these countries the 'moral majority' (Somfalvi, 2011), the 'quality countries' (Eldar, 2011) and the 'responsible part of the international community' (Horovitz, 2011). The fact that the EU makes up a significant part of this group and can influence others in the group is of course a tremendous source of normative power in the conflict, because the EU is widely seen to be 'the middle ground' in the international community between Israel's and the Palestinians' natural supporters (see, for example House of Lords EU Committee, 2007, p. 33). The 27 EU countries are, as Carlo Strenger (2011) has correctly noted, neither part of the Palestinians' third-world automatic majority; nor are they automatic Israeli allies under all conditions.

IX. The Israeli Government Uses NPE to Claim Victory over the Palestinians
The 2011 Palestinian UN bid is a difficult case to analyze based on Forsberg's four mechanisms of normative power, because there clearly was no persuasion against either side and no core NPE norms were diffused. And since the EU had no coherent position of its own, it did not act to shape the discourse, nor was it an example for others to follow. Yet, at the same time, this clearly was a case where the EU had significant normative justification at its disposal, as both the Israeli government and the PA attached tremendous significance to the EU's position on whether or not to recognize a Palestinian state. Moreover, this is probably the best example there is in the conflict of the EU being important for 'what it is', and thus a 'pure' form of normative power, completely disconnected from material incentives.
Before the 2011 Palestinian UN bid, the Israeli government's strategy was, in the words of a senior official, to 'take the teeth out' of a UN resolution (at this point is was not clear whether the PA would go to the UNGA or the UNSC) by depriving the PA of the votes from the EU countries (quoted in Abu Toameh and Keinon, 2011). When the hesitant EU countries failed to unanimously back the Palestinian bid, Israel claimed it had achieved a 'moral majority' against the Palestinians, thereby openly acknowledging the EU's normative power on this issue (Susser, 2012, p. 11). In fact, most members did not openly declare their position, but of those that did, the majority seemed to be against the Palestinian bid (Ravid, 2011). The 2011 UN bid is therefore actually an example of NPE working in favour of Israel's position, despite the fact that there was not a coherent EU position in this case.
Another interesting conclusion from this case study is that both the Israeli government and the PA regarded legitimacy from the EU as the key for giving legitimacy to their own positions on the issue. This is a very interesting conclusion, because it goes against the conventional wisdom in the literature that the EU in general has little legitimacy vis-à-vis Israel (See, for example Harpaz, 2007, p. 89;Harpaz and Shamis, 2010, p. 580). This finding does not necessarily contradict previous research, because it is well established that the EU has legitimacy problems in the conflict. But as this case study shows, legitimacy can take many forms. It can be high and important in some cases, but not in others, and it is not necessarily connected to wider attitudes in society.

X. Case Study 3: 'The Differentiation Strategy'
In the summer of 2013, the EU embarked on a new strategy in the Israeli-Palestinian conflict, which is increasingly referred to as 'the differentiation strategy' (see, for example, Levy, 2015;Lovatt and Toaldo, 2015). This new strategy is about separating the internationally-recognized Israel within the 1967 borders from the non-recognized occupied territories controlled by Israel since 1967. The major step in this new strategy was taken in the summer of 2013 when the European Commission issued new guidelines (the technical term was Commission Notice) against the Israeli settlements. The EU had prior to 2013 issued numerous declarations stating the illegality of the settlements and the inapplicability of EU-Israel agreements to the territories occupied by Israel in 1967 (see, for example, Council of the European Union, 2012a, 2012b). The European Court of Justice (ECJ) reached the same conclusions in a major ruling from 2010 (Infocuria C-386/ 08 -Brita, 2010, see also Pardo and Zemer, 2011, p. 263).
Few in Europe took notice of the guidelines when they were first issued, but they created a political storm in Israel. PM Netanyahu was quoted in the Israeli newspapers as saying that Israel's failure to stop the EU from issuing the guidelines represented 'the biggest failure he had encountered in 30 years of dealing with diplomatic and security issues' (quoted in Ravid, 2013). During the Israeli deliberations on how to respond to the guidelines, Prof. Manuel Trajtenberg, the chairman of the Israeli Planning and Budgeting Committee of the Council for Higher Education, bluntly told the Israeli government that if Israel gave up its share in Horizon 2020, it would be, in the words of one of the ministers who attended the meeting, 'the end of the world, a blow that even the devil never invented' (quoted in Verter, 2013). 3 After some deliberations, the Israeli government accepted the guidelines, though with a clause included that it did not recognize the EU clause stipulating that the occupied territories were not part of Israel (Lovatt and Toaldo, 2015, p. 6). Israel was, in the words of an Israeli official, allowed 'to march with [the guidelines] but not feel them' (quoted in Sheizaf, 2013). The PA welcomed the guidelines and FM Riyad al-Maliki said that they 'hugely helps the Palestinians and their position. It is a very important message for us' (quoted in Maan, 2013).
Differentiation has since 2013 taken a number of different forms. Seventeen out of twenty-seven EU members have issued business advisories warning businesses of the legal and financial consequences involved in doing business with entities linked to Israel's occupation (Lovatt and Toaldo, 2015, p. 7). In 2014, the EU implemented a policy of non-recognition of Israeli veterinary supervision beyond the Green Line, which effectively banned these products from entering the EU (EUbusiness, 2014). According to a senior official at the EU delegation in Tel Aviv, the Israeli Agriculture Ministry has been very co-operative in helping to separate these types of banned settlement products from those that originate within the Green Line (Interview with EU official, 6 October 2016). While not changing the realities on the ground in the West Bank, this is a small, but clear example of the EU diffusing and Israel adopting the core NPE norm of rule of law. In November 2015, the EU announced labelling of settlement products. Israeli PM Netanyahu responded by calling the new labels 'heinous'a term normally reserved for terror attacks in Israel (quoted in Ahren, 2015).

XI. Beginning to Set a New 'Normal' vis-à-vis the Settlements
While the differentiation measures have by no means stopped Israel's expansion of settlements, they have contributed to the non-recognition of them. There is much evidence to show that the EU has acted as an example and shaped the discourse on differentiation. Emphasizing the power of the example, the feeling among many Israeli commentators, both on the left and right, was that the guidelines against the settlements were the first actual step against Israel's occupation to be taken by a major international power (see, for example, Margalit, 2013;Sheizaf, 2013). 4 Dutch FM Frans Timmerman said after the settlements guidelines were issued in 2013 that 'for the European Union and the Netherlands, Israel ends at the Green Line' (quoted in Hass, 2013). The EU ambassador to Israel, Lars Faaborg-Andersen, told Israeli newspapers the following year, 2014, that the EU was 'disengaging from the settlements' (quoted in Bechor, 2014). Other actors in world politics, most notably the US government and leading human rights organizations, have explicitly endorsed the new labelling of settlement products, which, of course, enforces the power of the example and begins to set a new normal in that more and more actors differentiate between the internationally-recognized Israel and the non-recognized settlements (Associated Press, 2015). Probably encouraged by the differentiation strategy, a number of European companies and institutions have divested from Israeli entities directly involved in the occupation in recent years (Gordon and Pardo, 2015b, p. 423). Directly following the EU, Human Rights Watch (2016) published a major report in 2016 where it approved of all the EU's differentiation measures. In 2016 there was also a growing trend of what might be called more 'grassroots differentiation', where the PA, NGOs and other activists are involved in trying to get organizations like FIFA and companies like Airbnb, PayPal and Hewlett-Packard to suspend their activities with Israeli entities behind the Green Line (see, for example, Brown, 2016). The differentiation strategy was further mainstreamed in December 2016 when the UNSC adopted resolution 2334 which called upon all states 'to distinguish, in their relevant dealings, between the territory of the State of Israel and the territories occupied since 1967' (UNSC res. 2334, UNSC (2016)).

Conclusion: NPE can be Efficient in Shaping Discourse and Setting Examples, Less So in Diffusing its Core Norms
As the occupation of the Palestinian territories is approaching half a century, Israel's hold over the territories is seemingly stronger than ever before, but so is the non-recognition of the occupation and the settlements. Not a single country in the world recognizes that the West Bank is part of Israel. As the first case study showed, the EC/EU has played a key role in legitimizing a Palestinian state to include the West Bank, with East Jerusalem and Gaza as part of a future two-state solution. But while this is a clear example of the EU's normative power, it is perhaps an even clearer example of the limits of 'pure' normative power, which is totally disconnected from material power. The EU changed the discourse on a Palestinian state, but not the reality on the ground. A Palestinian state is probably less likely to materialize today than at any point since the Oslo peace process began in 1993. In the second case study, the normative power of the EU countries actually served Israel's interests by not recognizing Palestine, a development ECFR analysts Daniel Levy and Nick Witney (2011, p. 2) have referred to as 'perverse'. A different, potentially more effective NPE was displayed in the third case study, which is still an ongoing case. Here NPE is explicitly connected to material incentives, such as access to EU markets and research projects. Still, the normative component of the new differentiation strategy is very significant. Differentiation is not about money, neither for Israel, nor for the EU.
For Israel, it is about legitimizing its hold over the territories it captured in the 1967 war. For the EU, it is about delegitimizing the occupation of what it perceives to be Palestinian/Syrian lands.
Connecting to Forsberg's framework of analysis, it is clear that the EU has much more normative power in the Israeli-Palestinian conflict than the literature has previously acknowledged. It is also clear, as the case studies show, that both the Israeli government and the PA attach significant value to the EU's normative power in these cases. Taken together, the three case studies show that NPE can be efficient in shaping the discourse and setting examples in the conflict. These conclusions are not just empirically important, but have theoretical implications as well. Previous research on NPE in the conflict has largely focused on NPE's failure to diffuse its core norms, while tending to ignore its potential to shape the discourse and set examples. It is obvious that NPE in the Israeli-Palestinian conflict appears in a much better light when focusing on the latter.