European Union officials say diplomats are urging their governments to discourage investments in Jewish settlements in the West Bank and east Jerusalem — territories Palestinians claim for their future state, The Associated Press reports.

The officials said Wednesday, Feb 27 the recommendations are part of a non-binding internal report for European governments in their briefings on the Mideast peace process. The diplomats represent 22 countries, including Germany, France and the UK.

The diplomats recommend discouraging direct investments that support settlement construction, infrastructure and services. They also recommend European countries step up efforts to label settlement-made products sold in Europe.

The EU says Israeli settlements are illegal.