The decision was announced from the Israeli Foreign Ministry and comes amid heightened diplomatic strain between Israel and the European Union over settlements policy and the broader trajectory of the Middle East peace process.

The announcement followed reporting by Euractiv alleging that Kallas, during a closed-door diplomatic meeting in Mexico City in late May, compared Israeli policy in the occupied territories to apartheid-era South Africa, remarks that have not been independently verified.

In a strongly worded statement, Gideon Sa’ar said Kallas had acted with persistent bias against Israel and accused her of undermining diplomatic neutrality within EU institutions. "Ms. Kaja Kallas, the High Representative of the European Union for Foreign Affairs and Security Policy, has been acting obsessively and with blatant unfairness against the State of Israel for some time,” Sa’ar said. 

"It was recently widely reported that during her visit to Mexico she compared Israel to the racist apartheid regime that prevailed in South Africa. I thank the many European elected representatives who expressed reservations and condemned these serious things. However, so far, Kallas has refrained from any denial, response or comment.”

He added that Israel would suspend official engagement until clarification is provided, intensifying an already fragile diplomatic channel between Tel Aviv and Brussels.

The European Union has recently advanced discussions on measures targeting Israeli settlement activity in the West Bank, including sanctions against organizations and individuals linked to expansion projects. Several EU member states remain divided on the scope of these measures, with some advocating stronger economic pressure while others warn against further deterioration of diplomatic ties.

Responding to the Israeli announcement, Kaja Kallas emphasized the EU’s commitment to continued dialogue and a negotiated political solution. "Dear Gideon, as you know, the EU and Israel have a lot that binds us. I value our dialogue and engagement, and I am open to continue in that spirit, respectfully and constructively. Dialogue is the foundation of diplomacy, especially when differences arise,” she said. She reiterated that the EU supports a two-state solution and maintains opposition to settlement expansion in line with its established policy framework.

Diplomat News Network observed that the announcement triggered immediate reactions among European diplomatic circles, where officials privately described the move as an escalation that could complicate ongoing coordination on regional security and humanitarian issues. Outside the Israeli Foreign Ministry, journalists and staff were seen moving in and out of briefings under heightened security, reflecting the sensitivity of the announcement.

Analysts note that the rupture underscores widening divisions between Israel and key European institutions at a time of regional instability. The development may further constrain diplomatic communication channels, particularly on security coordination, trade discussions, and peace negotiations, as both sides maintain firm positions on territorial and political disputes.