Relations between Israel and the European Union are generally positive on the economic level, though affected by the Israeli–Palestinian conflict on the political level. In particular, Israel views four decades of EU declarations on the Israeli–Palestinian conflict as one-sided and pro-Palestinian.

Israel is associated with the EU through the 1995 Association Agreement; several other agreements cover sectoral issues. In addition, the relations between the two are framed in the European Neighbourhood Policy (ENP), the Euro-Mediterranean Partnership, and the Union for the Mediterranean.

The State of Israel was founded in 1948, while the European Economic Community—the direct predecessor of the European Union—was established in 1957. Already before the formation of the EU, the 1956 Suez Crisis highlighted the European countries lack of unity on Middle East policy. While France and the UK took military action with Israel, other states, notably West Germany, distanced themselves, focusing instead on postwar recovery and maintaining strong relations with the United States.

Israel and the European Economic Community established diplomatic relations as early as 1959. A first free trade area agreement was signed in 1975. The Venice Declaration of June 1980 marked a turning point in the European Community’s approach to the Israeli–Palestinian conflict. It was the first joint recognition of the Palestinians’ right to self-determination and called for their inclusion in peace talks, while affirming Israel’s right to security. The declaration signaled a shift from earlier unilateral actions, such as during the Suez Crisis, toward a more 'balanced' stance, distinct from the strongly pro-Israel position of the United States. The EC presented itself as a neutral mediator grounded in international law and as a key economic partner to both sides. In the early 1990s, around the time of the Oslo Accords, the EU strengthened its position as a key financial contributor and backer of the peace process. Adopting the role of a “civilian power,” it aimed to advance peace through economic support, institution-building in the Palestinian territories, and diplomatic engagement. In the Essen Council in 1994, the EU signaled its willingness to establish special relations with Israel.

Multilaterally, Israel takes part in the 1995 Barcelona process (Euro-Mediterranean Partnership), and the subsequent 2008 Union for the Mediterranean, and since 2003 in the European Neighbourhood Policy (ENP).

Bilaterally, after a Cooperation Agreement in 1975, an Association Agreement came into force in 2000, providing for preferential economic, commercial, technological and research status between the parties. It included measures for the creation of a free trade area in industrial goods, and the liberalisation of trade in agricultural goods, of services, and of capital movements. The agreement also set the basis for cultural, research and political cooperation.

The EU–Israel Association Agreement forms the legal basis governing relations between Israel and the European Union, modeled on the network of Euro-Mediterranean Agreements between the Union and its partners in the southern flank of the Mediterranean Sea.

The agreement with Israel incorporates free trade arrangements for industrial goods and concessionary arrangements for trade in agricultural products (a new agreement here entered into force in 2004), and opens up the prospect for greater liberalisation of trade in services and farm goods from 2005. The Association Agreement was signed in Brussels on 20 November 1995, and entered into force on 1 June 2000, following ratification by the 15 Member States’ Parliaments, the European Parliament and the Knesset. It replaces the earlier Co-operation Agreement of 1975.