Israel has warned it will retaliate against Britain if the Government imposes sanctions over its plans to expand settlements in the West Bank.

Israeli Foreign Minister Gideon Saar issued the warning after Foreign Secretary Ed Miliband pledged a “comprehensive reset” of Britain’s policy towards Israel.

Mr Saar said: “If Britain acts against Israel, Israel will act against Britain.”

“If they act, I think they will be making a big mistake,” the Israeli Foreign Minister told a Hebrew language news site.

The warning came as ministers indicated the Government could ban trade in goods from Israeli settlements in the West Bank.

Mr Miliband told MPs that Britain was examining how to stop British companies “financing, constructing or advertising new settlements”.

Continue reading

He accused Israel of “the crossing of a red line” over its plans for the controversial E1 settlement, which the UK Government considers illegal under international law.

The proposed development has been condemned by Britain over fears it would separate the West Bank from East Jerusalem and undermine the prospect of a Palestinian state.

Mr Miliband said: “This Government will not acquiesce in the destruction of the two-state solution.

“We will act, and I will set out a comprehensive set of measures in the coming weeks.”

He added: “We need a comprehensive reset of our policy across the piece.”

Prime Minister Andy Burnham also warned that Israeli decisions over the E1 development could “imperil, if not end, the two-state solution”.

Mr Burnham said the issue was “urgent” and told MPs the Government would update the Commons on its response soon.

Israel has issued tenders for the E1 settlement, with decisions potentially coming before the country’s general election in October.

Foreign Office minister Stephen Doughty suggested the Government’s response could include restrictions on trade with Israeli settlements.

Mr Doughty said ministers were “looking at further sanctions” as well as “measures to ban trade in goods with illegal settlements”.

Read More: Israel threatens to retaliate against Britain as Ed Miliband vows ‘comprehensive reset’ of relations