The virtual collapse of the Kerry initiative raises the specter of both increased turmoil on the ground and substantial international pressure on the parties. The diplomatic fallout of the failure of the current process cannot but compromise Israel’s already precarious standing on the world stage unless it reviews the premises of its current foreign policy — especially towards Europe. This involves, first and foremost, a thorough revamping of its response to external criticism.

For quite some time, Israeli government officials — and especially Prime Minister Netanyahu — have insisted on decrying anything that contains even a whiff of snubbing the country, its policies, its products or its actions. In recent weeks, possibly in anticipation of the breakdown of negotiations, new funds have been allocated to combat the seemingly “strategic” threat of the campaign to delegitimize Israel. As a result, in what is an undifferentiated, unsubtle and distinctly coarse manner, any act which is seemingly at odds with present Israeli positions is viewed as a manifestation of the intent to question Israel’s right to exist and roundly decried.

Conflating the refusal to support the settlement enterprise or to uphold the occupation with the growing movement to reject everything Israeli is, however, both foolish and counterproductive. It fails to distinguish between distaste with Israeli policies and delegitimation of Israel in its entirety; it often slips into irresponsibly equating disagreements over official moves with anti-Semitic tendencies; it consequently transforms critics of Israel into outright opponents and helps to fuel Israeli isolation. Nothing is to be gained from misleadingly dubbing any measure expressing opposition as another expression of BDS (boycott, divestment and sanctions). The time has come to explore the benefits inherent in a much more nuanced approach.

The best example of the penchant for confusing reluctance to support Israeli policy in the West Bank with boycotts of various sorts can be found in the reaction to the latest policies of the European Union. The guidelines on the eligibility of Israeli entities for funding by the EU promulgated in July 2013 and put into effect at the beginning of this year state clearly that the member states will not support groups or organizations which operate beyond the Green Line. “Their aim is to ensure the respect of EU positions and commitments in conformity with international law on the non-recognition by the EU of Israel’s sovereignty over the territories occupied by Israel since June 1967.”

The European opposition to continued Israeli rule over Palestinian areas — and especially to settlement construction — is based on the perception that these actions are illegal (in contrast to the US position which sees them as illegitimate). The steps the EU has taken are intended to give concrete expression to its positions and, as European leaders have repeatedly asserted, not to boycott Israel.

The Israeli government has chosen to interpret these measures otherwise, lashing out against the European move and accusing its leadership of effectively joining the boycott movement. This interpretation has totally ignored the consistency in the European position as documented in the various association agreements signed with Israel in the past. It has also overlooked the fact that the EU has always insisted (and Israel has acquiesced) to enforcing the rules of origin for Israeli products and excluding those manufactured in the settlements from its preferential taxation arrangements with Israel. Most significantly, Prime Minister Netanyahu and his ministers have not taken seriously the carrot that went along with the European stick, which promised an upgrade to a special relationship within the EU, should an Israeli-Palestinian understanding be reached (a status currently accorded only to Switzerland and Norway).

The Israeli pushback has unnecessarily strained relations with Europe at a critical moment. It unleashed an unprecedented spate of domestic criticism against its institutions; it threatened to compromise Israeli participation in Horizon 2020 (finally resolved through the application of the funding guidelines and the concomitant registration of Israel’s disavowal of their content); and it actually encouraged much broader discussion on economic measures against Israel.

The unprecedented visits of four key leaders to Israel in recent months — Angela Merkel, Francois Hollande, David Cameron and Martin Schultz — all of whom took pains during their less than friendly receptions in the Knesset to denounce the boycott against Israel — did little to dispel the climate of suspicion and displeasure. Israel’s mishandling of its European policy has harmed its long-term international interests by systematically confusing Europe’s reluctance to support the occupation with the boycott campaign.

The differences between the EU measures and BDS are considerable. The political purpose of the European move (and of others who refuse to support the settlements and its products) is to expedite a two-state solution; the goal of many proponents of global BDS is to facilitate the one-state option. The messages also vary: withholding support for activities beyond the Green Line is a way of expressing disagreement with continued Israeli overrule; the sweeping boycott of Israel is meant to raise doubts about its right to exist. The tools employed also differ: refraining from allocating funds that support disputed policies is not akin to boycotts, divestment and sanctions against Israel. Inevitably, the outcomes diverge considerably. The EU and its member states are committed to Israel’s sovereignty and determined to safeguard it — but not at the expense of the right to self-determination of the Palestinian people; key proponents of the BDS effort would simply like Israel to disappear.

The Israeli government does itself and its citizens a tremendous disservice by putting opponents of Israeli policies and denouncers of Israel in the same basket. Such an approach, while fuelling the mantra that the entire world is against Israel and propping up the current leadership’s already heightened sense of victimhood, actually does nothing to maintain Israel’s external support base or enhance its international maneuverability.

In an increasingly inimical setting, the lessons learned from the recent Israeli-European experience are instructive. First, global support for Israel’s legitimacy is inextricably tied to the realization of the two-state solution. Second, Israel’s allies are no longer content to allow it to pursue policies at odds with this objective with impunity. And third, they will increasingly introduce measures to drive home this point. To avert total exclusion from the international community and to ensure the country’s capacity to survive and thrive, they must internalize these messages. One can only hope that they have the good sense to do so.