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UK defends settlement sanctions after Israel orders consulate closure

London imposes import ban on Israeli West Bank goods as Israel demands consulate shut within 30 days and bars entry for 12 British lawmakers.

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Elena Kovač · Central Banks Desk · 19 Sept 2026 · 15:56 · 2 min read
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UK defends settlement sanctions after Israel orders consulate closure

The U.K. has defended new sanctions on Israeli settlement goods after Israel ordered London to close its east Jerusalem consulate within 30 days and barred 12 British lawmakers from entering the country.

Foreign Secretary Ed Miliband announced on Tuesday that the U.K. would ban imports from Israeli settlements built on the West Bank, stating the government's official view is that the occupation is unlawful. The move drew immediate retaliation from Israel, which accused the British government of "systematically working against" the country.

Israeli Foreign Minister Gideon Saar called Miliband's characterization of events in the West Bank as "ethnic cleansing" "outrageous lies." In a statement, Saar warned: "The message to every government that harms us is clear: you will lose your influence and relevance in the region."

On Wednesday, Miliband told the BBC the U.K. felt compelled to act, saying sanctions were imposed from a place of "deep concern" that waiting longer would make it too late to preserve a two-state solution. "We and our allies did not feel we could stand by and be passive and powerless in the face of this destruction of the two-state solution," he said, adding that Britain "could not simply stand by because we feared Israeli reaction."

Miliband described Palestinians from the village of Susya as being "intimidated, harassed, bullied out of their homes by these settler terrorists," saying Britain could not remain silent.

The West Bank remains the larger of the two Palestinian territories, with Israeli civilian settlements expanding for decades. A 2025 U.N. report documented 166 settlements home to more than 700,000 Israeli settlers. The United Nations and International Court of Justice regard the West Bank, including East Jerusalem, as occupied territory, and the U.N. has documented continued settlement expansion, settler violence and the forcible displacement of Palestinians.

The U.K.'s sanctions package includes measures targeting companies and individuals that facilitate settlement growth, along with an expansion of an existing arms export ban to cover all license applications that "materially contribute to the occupation." France and Canada also announced sanctions on Israeli settlements on Tuesday.

U.S. officials warned that British companies could face business restrictions in response. Secretary of State Marco Rubio told reporters the Trump administration had no comment on an American response but emphasized the importance of regional stability. "We don't want to see anything destabilizing going on right now in the West Bank with so much going on in the region," Rubio said. He added that the White House had been made aware of the U.K.'s decision in advance and noted, "Obviously, we're not going to do what the U.K. did."

This article was produced with AI assistance and edited by a Finance Review Daily journalist.
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Written by
Elena Kovač
Central Banks Desk

Elena covers macroeconomic data and policy across the eurozone, translating industrial output, inflation and growth figures into what they mean for markets.

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UK defends settlement sanctions after Israel orders consulate closure · Finance Review Daily