Israel said on Tuesday it was closing the British consulate in East Jerusalem after the UK, France and Canada announced plans to restrict imports from Israeli settlements in the West Bank.
The move marks a sharp escalation in tensions between Israel and the UK as international pressure grows over Israeli settlement policy.
Israeli Foreign Minister Gideon Saar said Britain would also no longer participate in a U.S.-led coordination mission for Gaza, while some British officials and other nationals would be banned from entering Israel.
“The British move is morally distorted, and constitutes blatant interference in the affairs of a sovereign state and its electoral process,” Saar said, describing comments by British Foreign Secretary Ed Miliband as accusations that were “outrageous lies”.
The British consulate in East Jerusalem is accredited to the Palestinian Authority in the West Bank.
Saar said he had coordinated Israel's response with Prime Minister Benjamin Netanyahu. Israel is due to hold an election in late October.
The Israeli response came after 12 countries said on Tuesday they would introduce, support or consider trade restrictions on goods from Israeli settlements in the West Bank.
The foreign ministers of Canada, Denmark, Finland, France, Iceland, Ireland, Norway, Poland, Portugal, Spain, Sweden and the UK announced the move in a joint statement.
“The Government of Israel's actions in the West Bank are undermining the possibility of a two-state solution,” the ministers said.
The countries said they planned to introduce national restrictions, support European measures or actively consider trade curbs and other measures targeting goods from Israeli settlements.
Britain, France and Canada announced plans to block imports from Israeli settlements, while the wider group signalled it was prepared to take further steps in support of a two-state solution.
Miliband said Britain could no longer simply “call out” injustice and suffering but had to act against the expansion of settlements, which he said threatened the viability of a Palestinian state.
Canadian Foreign Minister Anita Anand also said settlements undermined efforts towards long-term peace.
“Successive Canadian governments have held the position that a two-state solution is the way forward for long-term peace that also addresses Israel's legitimate security concerns. Illegal settlements in the West Bank significantly undermine these objectives,” Anand wrote on X.
Earlier on Tuesday, Israeli President Isaac Herzog urged foreign governments to abandon sanctions and boycotts, warning that expected British restrictions on settlement trade would be a “grave miscalculation”.
“Sanctions are not a solution. Dialogue is,” Herzog said. “I say to all foreign governments: Stop! Step away from the dead-end of sanctions and boycotts.”
Herzog argued that the measures would harm Palestinians who rely on employment and business linked to settlements and described the British move as “gross interference” in Israel’s upcoming elections. He said such sanctions would “fall on the wrong side of history”.
Israeli settlements in the West Bank are considered illegal under international law by most of the international community. Israel disputes this, citing historical and biblical connections to the territory, alongside security considerations.
International concern has intensified over settlement expansion and violence in the West Bank, amid warnings that further construction could undermine the territorial continuity of a future Palestinian state.
The trade measures are the latest in a series of actions targeting Israel's settlement policy and highlight growing strains between Israel and some of its traditional allies.
The 12 governments said any measures would be introduced in accordance with their respective national procedures.
A Reuters investigation published on Tuesday also found that the Israeli government was financing some radical settlers in the West Bank who use unauthorised outpost farms to displace Palestinians.
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