Launched in January, the three-year-long Aeroceptor project, according to its own literature, aims to help law enforcement authorities to stop "non-cooperative vehicles in both land and sea scenarios by means of Unmanned Aerial Vehicles."
Israel's ministry of public security, global weapons manufacturer Israel Aerospace Industries and Israeli-based Rotem Technological Solutions are among the list of 12 participants, most of which are based in the EU.
German Green MEP Ska Keller told this website that the Aeroceptor projector is a first in the EU because previously EU drones were developed only for surveillance and not for interception.
"Are we going to play Battleships now with drones? With the help of the Israeli defence industry?" said Keller, referring to a popular children's game, who is also the Green group's migration and civil liberties spokesperson.
The Aeroceptor project received just over €4.8 million in total funding, with the European Commission pitching in €3.5 million. The remainder comes from the consortium's participants.
"Unfortunately I cannot tell you how much they give [Israelis] or what they do, this is confidential information," one of the participants, who is based at the Austrian Institute of Technology in Vienna, told this website.
The contact said the project results are intended for the "benefit of citizens and to improve their security, without posing any risk to anyone, even to the bad guys."
The researchers want to develop special on-board systems that would allow the drone to intercept moving cars or speeding boats. Details on what those systems would look like or how much the drones would weigh is classified.
"At this stage detailed technical information is shared only internally between the project partners," Aeroceptor project co-ordinator Franco Fresolone said in an email.
Available project information also does not specify if such drones would eventually fly over EU member states, in Israeli airspace or in both.
For its part, the commission said Israel is legally entitled to take part in EU funded projects.
But it did not respond to queries on why they are participating or why the project is receiving EU funding in the first place.
Meanwhile, a commission staff working document on drones published last September lays out arguments in favour of a class of 'civilian' drones that could, for instance, spot check high-tension power lines, monitor gas lines or perform digital mapping.
The document summarises the results of a series of five workshops from 2011 and 2012 where participants included EU ministries of interior, ministries of defence and international military organisations.
One idea is to create duel-use "hybrid" commercial and military drones.
But market entry and expansion into the EU of drones weighing more than 150 kilos is hampered by difficult-to-obtain flight permissions and an airspace which is segregated along national lines.
Removing the airspace restrictions, notes the paper, would "create new markets of aerial services, in the same way that the iPad created an entirely new and unpredicted market for mobile data services."
The staff paper does not mention the use of drones in member states for law enforcement purposes though some police have limited experience.
In Germany, police in the state of Lower Saxony use an €8,000 MD4-200 drone shaped like a miniature helicopter.
The drone is mainly used to scout, take photos of barricades and highlight potential hotspots ahead of demonstrations.
In Belgium, police in Genk use a chopper-like Altura Pro AT6 drone to monitor large events. Attached with special heat sensors, the drone can also signal out residences with hidden-away grow labs of marijuana.
Mathias Vermeulen, a research fellow at the European University Institute in Italy, told EUobserver that the weight class of such drones is typically below 150 kilos and would escape the kind of future EU regulation outlined in the commission's staff working document.
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