British PM reportedly ready to announce Israeli settlement trade ban in coming weeks

British sanctions on Israel trade could, however, cause a split inside the Labor Party, where a third of the party has signed a letter to the new PM calling for sharp measures against settlements.

New British PM Andy Burnham is set to announce a ban on trade with Israeli settlements in the West Bank imminently, The Times and The Telegraph reported on Thursday.

According to both reports, citing government officials, Burnham is considering a trade embargo within the coming weeks. The new sanctions regime would likely stop the exchange of both goods and services.

Foreign Secretary Ed Miliband already announced on August 19 that measures are being prepared to "target sanctions at those who participate in illegal settlement expansion," following Israel's announcement of a tender for the E1 settlement project.

British sanctions on Israel trade could however cause a split inside the Labour party.

On one side, 140 Labour members of Parliament (about a third of the party’s representation in the House of Commons) have signed a letter to the new prime minister calling for sharp measures against the Israeli settlements.

On the other side, Labour Friends of Israel has warned it would be impossible to ban trade from settlements only, making the plans a “de facto boycott of all of Israel”.

LFI says steps should be tailored to violent extremist settlers, not a full 'boycott'

In its most recent report, LFI said Britain should continue to take considered and calibrated steps against violent extremist settlers, but that at the same time, any further untargeted steps the UK government takes, "for instance, sanctions going beyond violent extremist settlers and organizations," would likely have a number of negative effects.

"A boycott of all trade with settlements is practically and politically impossible," said LFI. "It would affect all Israeli businesses operating in the settlement blocs, as well as East Jerusalem and the Old City, where major Israeli businesses like Bank Hapoalim and Teva operate, and where the tourism sector is critical for Israeli and Palestinian workers."

"A settlement boycott would thus become a de facto boycott of all of Israel, which would rightly be perceived within the UK Jewish community as a further example of the government singling out and targeting Israel for punitive action and harsh rhetoric," it added.