UK set to sanction Israeli settlements in the West Bank in major reset of relations

The United Kingdom is set to impose sanctions on Israel on Tuesday in response to the expansion of Israeli settlements in the occupied West Bank, a move seen as a significant "reset" of UK-Israel relations. Foreign Secretary Ed Miliband stated that these sanctions aim to prevent the destruction of the two-state solution. This decision marks a major conflict between Israel and a longtime Western ally, as international criticism over Israel's policies in the West Bank grows, particularly regarding escalating settler violence against Palestinians.

The sanctions will likely target products from settlements, but will have minimal impact on the $8 billion annual trade between the two countries, with only a small portion of this trade originating from the West Bank. UK exports to Israel primarily consist of medicinal and pharmaceutical products, while the top imports are fruits and vegetables.

Israeli President Isaac Herzog criticized the sanctions, calling them a "serious error in judgment and choosing the wrong side of history" and stating that "dialogue is" the solution.

The sanctions could also prompt a response from the Trump administration, with US Ambassador Mike Huckabee warning of a possible impact on British businesses. The UK sanctions come amid Israel's pursuit of the controversial E1 settlement project, which critics argue splits the West Bank into north and south, making a contiguous Palestinian state virtually impossible. Israeli far-right Finance Minister Bezalel Smotrich supports the expansion as a way to "bury" the idea of a Palestinian state.

The UK is not alone in condemning the planned expansion; the government, along with others, had previously sanctioned Smotrich and far-right National Security Minister Itamar Ben-Gvir for inciting violence against Palestinians. Both East Jerusalem and the West Bank, captured by Israel in the 1967 war, are considered by international law to be occupied territories, and Israeli settlements there are widely viewed as illegal.

Miliband condemned the plan earlier this month, calling it an "unacceptable and destructive act" that threatens peace, security, and the prospects for a viable Palestinian state. The UK warned businesses against participating in the construction of the E1 project due to legal and reputational risks.