The German government is conditioning continued grants to Israeli high-tech companies, as well as the renewal of a scientific cooperation agreement, on the inclusion of a territorial clause stating that Israeli entities located in West Bank settlements or East Jerusalem will not be eligible for funding, Israeli Haaretz daily reported Thursday. According to the report ,Israel fears the German move will lead other European Union member states to follow suit. Haaretz said that the German decision represents a significant escalation in European measures against the settlements,adding that the Horizon 2020 scientific cooperation agreement, which Israel signed with the European Union a few weeks ago, prohibited EU funding for academic research conducted in the settlements. Berlin has now extended the funding ban to private companies located over the Green Line. Moreover, the boycott against the settlements has now spread from EU institutions in Brussels to individual EU members. Senior Israeli government officials, who asked to remain anonymous, told Haaretz that Israel is currently negotiating with Germany over two agreements that would funnel money from Germany’s Federal Ministry of Education and Research to Israeli academic institutions and high-tech companies. Meanwhile,Israel upgraded an institution located in the West Bank settlement of Ariel from a college to a university. Senior German officials informed their Israeli colleagues several months ago that German universities had been pressuring the federal ministry not to cooperate with Israeli research institutions in the West Bank. Due to this pressure, the ministry decided that when the agreement came up for renewal, it would demand a new clause forbidding any money to be given to academic institutions in the settlements. In other words, researchers from Ariel University won’t be able to apply for grants, and this must be made clear to them, the German officials told their Israeli counterparts.