Israel criticized a European Union listing that stated an Israeli city was a settlement and said its products will not be allowed duty-free entrance into Europe.

"For anyone who deals in reality, there is not the slightest doubt that the Modi'in, Maccabim and Re'ut localities are an integral part of Israel, and their future is not in question," a Foreign Ministry statement published by The Jerusalem Post said. "The EU ignores reality when it extends the domain of conflict to places and issues that do not belong there. "

Modi'in, Maccabim and Re'ut were merged into a city in 2003, located approximately half way between Jerusalem and Tel Aviv. The municipality lies beyond the Green Line in an area known as "no-man's land," a narrow strip of land between Israel and the West Bank whose sovereignty was never fully clarified after the War of Independence in 1948.

For the past seven years, Israeli exporters to European Union countries have had to list zip codes and place names of where goods are manufactured. Under a free trade agreement with the EU, Israeli products are permitted duty free entry into Europe but not products made in West Bank settlements.

Due to apparent pressure from pro-Palestinian groups, the EU decided to publish a list of zip codes of Israeli products from which duties must be levied, and for the first time also published the names of the locations, the newspaper said.

The list stated three codes 71724, 71728 and 71799 for Modi'in, Maccabim and Re'ut respectively, the Post said. The move angered Israeli foreign ministry officials who said the issue was still being discussed with European officials.