Israel has warned Britain that it could take action if the UK imposes sanctions over Israeli settlement expansion in the West Bank.
Israeli Foreign Minister Gideon Saar issued the warning as the British government prepares to review its policy toward Israel.
Saar said Israel would respond if Britain introduced sanctions against Israeli settlements or related trade.
“If Britain acts against Israel, Israel will act against Britain,” Saar said.
He also warned that Britain would make “a big mistake” by imposing such measures.
The dispute follows comments from UK Foreign Secretary Ed Miliband about a major policy change. Miliband said the British government wants to “reset” its approach to Israel in the coming weeks.
The proposed measures could target British companies that finance, build or promote new Israeli settlements in the West Bank.
The UK government considers the settlements illegal under international law. It has also criticised Israel’s plans for the E1 settlement area.
British officials argue that the E1 project could create a territorial divide between the West Bank and East Jerusalem. They warn that such a move could make a future Palestinian state harder to establish.
Prime Minister Andy Burnham also raised concerns in the House of Commons. He warned that further Israeli action around E1 could seriously damage prospects for a two-state solution.
“We’ve seen the really quite worrying statement about the E1 extension and the settlements there,” Burnham said.
He added that decisions made before Israel’s election could “imperil, if not end” the two-state solution.
Miliband also told MPs that the UK would not accept actions that threaten the possibility of a Palestinian state.
“This Government will not acquiesce in the destruction of the two-state solution,” he said.
“We will act, and I will set out a comprehensive set of measures in the coming weeks.”
Foreign Office minister Stephen Doughty suggested that the review could include restrictions on trade with Israeli settlements.
He said the UK had strongly condemned settler violence and Israel’s E1 plans.
Doughty also said British companies should not finance, construct or advertise new settlements.
The dispute could further strain relations between Britain and Israel. The two governments now face difficult discussions over sanctions, trade and the future of the Israeli-Palestinian conflict.
