According to an article in the Israeli newspaper Haaretz on Friday, Israel’s foreign ministry has instructed its EU envoys to block what they call the “Swedish initiative.”

The newspaper claims that it has seen official statements by senior Swedish official and other documents which refer to Jerusalem as the capital of the two states.

”Israeli missions in Europe were instructed to investigate, discreetly, the position of the EU member states regarding the Swedish initiative,” the article states.

”And whether this was an attempt at a diplomatic coup or an initiative that enjoys broad support.”

According to the Israeli government, this new position could have a serious effect on EU contributions to the peace process.

However, a source from Sweden’s foreign ministry told newspaper Dagens Nyheter that the evidence is unfounded. However, changes have been made to refer to Jerusalem as a future capital for Israel and Palestine.

”This has come about after requests from many member states and has been discussed by all 27 EU countries down to the smallest detail,” the source told DN.

”Essentially this is nothing new,” the source added. ”To achieve a lasting peace solution, it has long-been the understanding of the EU that Jerusalem needs to become the capital city of the two states.”

Newspaper Svenska Dagbladet also quotes a foreign ministry source who denies the allegations that a new position has been driven by Sweden.

”It sounds like an old assertion from Israel that Sweden wants to introduce a change in policy,” the source said.

Relations between the two countries have been strained since a controversial article was published in Swedish newspaper Aftonbladet accusing Israeli soldiers of harvesting organs from dead Palestinians.

Meanwhile, the Israeli government has expressed surprise that a cancelled visit by Swedish foreign minister Carl Bildt, planned for September, has yet to be rescheduled.