UK to adopt tougher stance on Israel with illegal settlements trade ban

Ed Miliband will announce a broad reset of the UK’s relations with Israel on Tuesday, promising the government will take a more active approach in supporting the Palestinian cause.

In an intervention which has already drawn fierce criticism from the US and Israel, the foreign secretary will impose a UK ban on the trade in goods and some services from illegal Israeli settlements.

He has also told civil society groups he is determined to reassert support for a two-state solution to the conflict, with an appeal for the protection of Palestinian rights and respect for international law.

The prime minister, Andy Burnham, spoke to the US president, Donald Trump, on Monday night, a call which No 10 said “stressed the importance of a two-state solution”, but it gave no other details of the conversation.

On Tuesday the US ambassador to Israel said the US could issue its own reprisals against the UK. Mike Huckabee, who had claimed the Labour government is gripped by “Jew hatred”, told BBC Radio 4’s Today programme it would “do great damage to any Brits who are doing business in a number of states in the US”.

He said he did not “know what all of the national sanctions or repercussions or retaliations will be from the US, it hasn’t been announced yet … but one of the largest US states, Florida, that has a law that if this action is taken, then Brits will not be able to do business with any company or business in Florida”.

The work and pensions secretary, Pat McFadden, said on Tuesday that the motivation for the move was the desire to protect the viability of the two-state solution.

“At the heart of the statement is the idea that the UK, along with many other countries, do not want to see the possibility of a two-state solution in Israel and Palestine being erased by changes to the facts on the ground, and the reason that danger has become more urgent is because of expanded settlement activity in recent weeks and months,” he told Sky News.

Plans in the “E1” area could mean the “effective cutting off of the north of the West Bank from the south of the West Bank”, McFadden said. “But I think it’s also important to say that Israel is an important trading partner for the UK. This isn’t intended to be a boycott of all Israeli goods.”

In his statement to MPs, Miliband is expected to use firmer language than his recent predecessors in calling out the humanitarian injustices suffered by Palestinians in Gaza.

The steps he lays out are likely to fall short of the full set of demands made by Palestinian advocacy groups, but they will still be seen as a sign that the UK is moving beyond traditional rhetorical support for a two-state solution towards active steps to forestall the expansion of illegal settlements in the West Bank – widely seen as intended to destroy the prospect of a Palestinian state.

Israel has already threatened reprisals over Miliband’s previous claim that the Israeli military has held back aid for Gaza. Israel’s far-right finance minister, Bezalel Smotrich, appeared to respond to the reports by saying: “Expel the British ambassador tonight!”

The prime minister, Andy Burnham, spoke to Donald Trump and key Gulf allies, such as Qatar, on Monday to brief them on the government’s plans in the region.

Polling released to the Guardian shows Britons across the political spectrum favour banning trade with illegal Israeli settlements by a margin of more than two to one.

The polling, conducted by Opinium and published by the European Council on Foreign Relations, shows that only 18% of UK adults oppose a ban on trade in goods with Israeli settlements, compared with 46% in favour. Support rises to nearly three-quarters when those who did not express an opinion are excluded.

Miliband’s statement will stand by his claim that the Israel Defense Forces, in the name of security, are placing unnecessary controls on aid entering Gaza, creating a horrific situation. It is understood, however, that he is sceptical of the UK’s leverage to resolve the situation apart from calling for the restrictions to be lifted.

His claim that aid was being held back was denied by the Israeli foreign ministry at the weekend.

Miliband is likely to go further than his predecessors in placing the settlement measures firmly in the context of upholding international law, including the findings of two key institutions, the international criminal court and the international court of justice (ICJ), which are under attack by the US.

The package is unlikely to include sanctions over aid restrictions into Gaza, or to describe what has happened in the territory as a genocide. The UK has kept open the option of joining countries such as South Africa at the ICJ to claim Israel is in breach of the court’s previous rulings.

But by acting decisively on trade, Miliband has set aside warnings that a polarising UK intervention may help Benjamin Netanyahu’s chances in Israel’s election next month.

British sources said that even Israeli military officials had warned their prime minister that the IDF would struggle to defend new settlements and outposts in the northern West Bank, because they lack basic security infrastructure and were established for political rather than security reasons.

Despite US criticism of the UK stance, Washington has also been putting pressure on Netanyahu over the settlements issue, to the point that he has called for some to be dismantled, saying they were not established with the necessary permits. Israel has previously demolished some outposts, but they are often rebuilt soon after.

The UK ban on trade in settlement goods, long parried by the Foreign Office as impossible to implement, is in line with the ICJ advisory opinion in 2024 requiring governments not to aid or assist an Israeli occupation of Palestinian territory, not just illegal settlements. The UK government has never formally replied to the opinion, but ministers in Keir Starmer’s government said it was broadly compliant.

The measures on settlements may require primary legislation to ban the trade in goods rather than an easier statutory instrument, while the trade ban will extend to some services including financing and advertising illegal settlements.

The Foreign Office has previously argued that it was impossible to distinguish between products coming from illegal settlements and those from Israel. The UK officially regards all Israeli civilian settlements built on territories captured during the 1967 six-day war as illegal under international law.

Total trade in goods and services between the UK and Israel in 2025 was £6bn, and the scale of the disruption may depend on Israeli reprisals.

Goods produced in Israeli settlements have not been entitled to preferential tariff treatment upon entry into the UK since 2005. The country has also issued guidance on misleading labelling and urged businesses not to trade with or be engaged in economic and financial activities in Israeli settlements. The new measures will make such investments unlawful.

The UK reset was made more urgent by Israel’s E1 settlement project east of Jerusalem from November. But the Burnham government also feels compelled to act because of the increase in settler violence in the West Bank and the failure of Trump’s Board of Peace after six months to secure the twin objectives of Hamas’s disarmament and Israel’s withdrawal from Gaza.

Labour is also under domestic pressure from the Greens on Palestine. The party leader, Zack Polanski, is expected to stand in the 8 October Holborn and St Pancras byelection triggered by Starmer’s resignation as an MP. The new Labour policy may give the party’s candidate some political cover against Polanski.

In a sign of the potential ramifications for Miliband, Netanyahu’s older son, Yair, suggested last week that the Falkland Islands belonged to Argentina, not Britain.

He is not a minister, but after his comments Trump indicated that Washington could reconsider its position on British sovereignty over the islands.

Trump said last Thursday that he would not back Britain if Argentina were to invade the islands. He told GB News: “Your country was not there to help me” when the US and Israel began their war on Iran in February.

The Foreign Office declined to comment when approached by the Guardian.