JERUSALEM (AP) - Israel's deputy foreign minister says Israeli groups operating in the occupied territories will not be "punished" under an agreement with the European Union over a funding ban.

JERUSALEM (AP) Israel's deputy foreign minister says Israeli groups operating in the occupied territories will not be "punished" under an agreement with the European Union over a funding ban.

Zeev Elkin told Israel Radio that a compromise reached will allow groups who operate in the West Bank or east Jerusalem to apply for European funding for a 70 billion euro research project known as "Horizon 2020." But money given would not be allowed to serve projects in those territories, which the Palestinians want as part of a future state.

Elkin said Wednesday that Israel would compensate institutions ineligible for EU funding.

EU guidelines prevent funding for projects or institutions in territories Israel captured in 1967. The guidelines complicated Israeli efforts to sign on to the research project.