The nuclear deal signed with Iran, and Israel's participation in an EU project which bars settlement funding, is proving the effectiveness of external pressure on the Jewish state, experts say.

US Secretary of State John Kerry arrived in the region Wednesday for his first visit since world powers reached an interim agreement with Iran to scale back its nuclear programme in exchange for limited sanctions relief, which Israel has denounced as "a historic mistake".

It also comes after the Jewish state agreed to join a EU scientific research project, despite the fact it bars funding for any Israeli entity with operations beyond the 1967 Green Line.

For the Palestinians, the deal reached with Iran, despite massive Israeli opposition, could have resonance for the waterlogged peace talks.

"What happened in Geneva is a good deal, and a good model," chief Palestinian negotiator Saeb Erakat said at an event marking the one-year anniversary of the UN General Assembly recognising Palestine as an observer state.

"It's a good model that could be applied here also, if you chose to."

He also hailed European Union guidelines unveiled this year which bar any EU grants or funding for scientific or research project with ties to the settlements.

Omar Barghouti, a founding member of the Boycott, Divestment and Sanctions movement, which lobbies for the economic, cultural and academic boycott of Israel, said the guidelines were "a first step in the right direction".

"Despite its unparallelled colonial arrogance, Israel's far-right government has climbed down the tree and accepted a new EU reality that cannot continue business as usual with Israeli institutions and banks that are involved in the occupation and settlement business," he told AFP.

"Public grassroots and civil society pressure in EU countries on government officials and on the EU bureaucracy has been the most important factor behind the relative strengthening of EU compliance with its own laws and... its obligations under international law."

Andreas Reinicke, the EU's representative to the peace process, has warned if the ongoing talks failed, the campaign to clearly label products as made in the settlements would gain pace.

"When I assumed office (in February 2012), there were two countries that supported marking goods from the settlements," he said, quoted by Maariv newspaper.

"Now, 14 countries support this... Obviously this matter will come up again if the sides do not reach an agreement."

'Paying the price of the occupation'

The left-leaning Haaretz newspaper said the boycott threat was effective and had forced Israel's hand in the case of the EU's flagship Horizon 2020 research funding programme, which it agreed to join last week despite the ban on funding for groups linked to the settlements.

"It appears that international sanctions work and that a boycott is a tool like no other," wrote commentator Gideon Levy, an outspoken critic of the occupation.

Israel's signing of the Horizon 2020 agreement "is irrefutable proof that a boycott threat works well with Israel, too.

"So the time has come for sanctions. This worked with Iran, and it will work with Israel."

Even Kerry, who has thrown his full weight behind the talks, would eventually come to realise that, wrote Levy.

"Even he will eventually come around because as long as Israelis don't pay a price for the occupation or are blind to it, they won't end it."

In the same paper, Moshe Arens, who is from the opposite end of the political spectrum, denounced the decision "to succumb" an ultimatum by EU foreign policy chief Catherine Ashton, while acknowledging it would be of financial benefit to Israel.

"But can the cost to Israel be measured only in monetary terms? How about the cost to Israel's image?" he asked.

"And the cost of the precedent set by this ignominious retreat from the positions held by successive Israeli governments regarding the Israelis residing beyond the 1949 armistice lines?"

The New York Times said the Iran deal was likely to force Israel to face up to a new reality -- which could impact on its relationship with the Palestinians.

"Just as the United States has had to adapt to a world where its power is unmatched but no longer determinant, Israel will have to do the same," wrote Roger Cohen.

"It was important that President (Barack) Obama set down a marker, as he has through this deal, one that may spur new strategic reflection in Israel."