The United Kingdom is expected to announce sanctions against Israel on Tuesday over the expansion of Israeli settlements in the occupied West Bank, in what could mark a major shift in relations between the two countries.
Foreign Secretary Ed Miliband said the measures were being considered as part of efforts to prevent further damage to the possibility of establishing a two-state solution, under which Israel and an independent Palestinian state would exist alongside each other.
The expected sanctions would represent a significant disagreement between Israel and a country that has historically been one of its key Western allies. They also come as criticism grows internationally over Israeli settlement policies and increasing settler violence against Palestinians in parts of the West Bank regarded by much of the international community as territory for a future Palestinian state.
Any sanctions targeting products from Israeli settlements are unlikely to have a major effect on overall UK-Israel trade, which is worth about $8 billion annually. Only a small portion of that trade involves goods from the West Bank.
According to the UK Department for Business and Trade, Britain’s largest exports to Israel include medicinal and pharmaceutical products, while fruits and vegetables are among its leading imports.
Israeli President Isaac Herzog criticised the proposed measures, describing sanctions as a “serious error in judgment and choosing the wrong side of history.”
Speaking at an event marking 30 years of cooperation between Israel and the European Union on research and innovation, Herzog said, “Sanctions are not a solution. Dialogue is.”
The move could also lead to tensions between Britain and the administration of US President Donald Trump. US Ambassador to Israel Mike Huckabee, who has defended Israeli settlements in the West Bank, told BBC News on Tuesday that he expected Washington to respond.
“I think without a doubt there will be (a reaction),” Huckabee said, warning that the measures could have a “huge impact on British businesses.”
The proposed sanctions come as Israel moves ahead with the controversial E1 settlement project, which has drawn widespread international condemnation.
Critics say the project would effectively divide the West Bank into northern and southern sections, making the creation of a geographically connected Palestinian state significantly more difficult. It would also separate East Jerusalem, which Palestinians claim as the capital of a future state, from other parts of the West Bank.
In late August, Israel’s Housing Ministry invited bids for more than 1,200 housing units in the E1 area. The project is intended to establish a continuous bloc of Jewish settlements stretching from East Jerusalem into the West Bank.
Israel’s far-right Finance Minister, Bezalel Smotrich, has openly supported the settlement expansion, presenting it as a means of preventing the creation of a Palestinian state.
“The Palestinian state is being erased from the table not with slogans but with actions,” Smotrich said after the E1 project received its final approval.
Britain and other countries imposed sanctions on Smotrich and Israel’s far-right National Security Minister Itamar Ben-Gvir last year over what they described as “repeatedly inciting violence against Palestinians.”
Israel captured East Jerusalem and the West Bank during the 1967 war. The territories are regarded as occupied under international law, while Israeli settlements established there are widely considered illegal by the international community.
Miliband has previously condemned the E1 development, describing it as an “unacceptable and destructive act” that crosses a “red line”. He called for the plan to be reversed immediately and summoned Israel’s Chargé d’Affaires in London in August.
“The impact of settler violence and terrorism has been catastrophic for Palestinian communities,” Miliband said.
He warned that continued settlement expansion “threaten(s) peace, security and the prospects for a viable Palestinian state.”
Britain was also among several European countries that warned international businesses in May against participating in the E1 project, citing potential legal and reputational consequences.
Canada, Australia and New Zealand also supported the statement, which said conditions in the West Bank had “deteriorated significantly” as settler violence reached “unprecedented levels.”
“Britain will not stand back and accept the destruction of the Two-State Solution,” Miliband said, referring to the proposed framework for an independent Palestinian state existing alongside Israel.
Miliband told British lawmakers on Monday that he would announce a “comprehensive set of measure in the coming weeks.”
Israel has warned that any British sanctions could prompt retaliation.
Israeli Foreign Minister Gideon Sa’ar told local media last week that Israel would respond if Britain imposed sanctions.
“If Britain acts against the State of Israel, the State of Israel will act against Britain. We have the tools,” he told Ynet News.
“The period is over when people act against the State of Israel and the State of Israel doesn’t respond.”
Israel gave final approval to the E1 development last year, clearing the way for more than 3,400 housing units.
“Every settlement, every neighborhood, every housing unit is another nail in the coffin of this dangerous idea,” Smotrich added.
The E1 project has gained momentum under Prime Minister Benjamin Netanyahu’s right-wing government, which has made expanding Israeli settlements a key policy objective.
While many settlements are established through state-backed projects, settler groups have also created numerous unauthorised outposts in recent years. Human rights organisations and monitoring groups have accused authorities of eventually granting official approval to some of these developments after they were established through violence or physical force.
Amnesty International and other rights groups have accused Netanyahu’s government of failing to adequately address settler attacks against Palestinians, describing the violence as part of a wider system of “state-supported settler violence.”
