JERUSALEM (AP) — A senior European official on Wednesday painted an alarming picture for Israel if Mideast peace efforts fail, saying the country could face deepening economic isolation if it presses forward with construction of Jewish settlements.

The comments by EU Ambassador Lars Faaborg-Andersen were the latest salvo in an increasingly contentious war of words between Israel and the European Union over settlement construction. Last week, Israeli Prime Minister Benjamin Netanyahu accused the EU of unfairly singling out Israel for settlement construction while ignoring Palestinian transgressions.

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