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Israeli Prime Minister Benjamin Netanyahu gives a speech in Washington, DC on September 29, 2025. [Will Oliver/EPA/Bloomberg via Getty Images]

The Yedioth Ahronoth newspaper in Israel on Wednesday described the announcement by 12 Western countries, led by Britain, to restrict trade with illegal Israeli settlements in the occupied West Bank as a “diplomatic setback and a significant failure” for Prime Minister Benjamin Netanyahu’s government.

Britain, Canada, Denmark, Finland, France, Iceland, Ireland, Norway, Poland, Portugal, Spain and Sweden announced Tuesday their intention to impose restrictions on trade in goods originating from illegal Israeli settlements.

In a statement, the 12 countries said the Israeli government’s actions in the occupied West Bank undermine the possibility of a two-state solution and urged Israel to immediately halt illegal settlement expansion and violence by occupiers.

Yedioth Ahronoth said that “with the European Union unable for months to reach consensus on sanctions that would ban imports from Israeli settlements, several European countries have begun pursuing restrictions independently, moving the issue from EU-wide diplomacy to national legislatures.”

The absence of an agreement in Brussels led governments supporting the restrictions to conclude that each country would need to enact its own legislation to ban imports from illegal settlements, it said.

The newspaper noted that “the Netherlands has already adopted such measures, although the Dutch order has been challenged in court on claims that it is discriminatory. It is scheduled to take effect Sept. 22.”

“Spain already has legislation in effect, although Israeli exports to the country from the West Bank are limited. Similar legislation is now being discussed in Luxembourg, while Sweden is pursuing its own process,” it added.

Belgium has announced plans for similar action but has not yet enacted legislation, “meaning no restrictions are currently in force there,” said the newspaper.

READ: Italian opposition slams government for not joining sanctions on illegal Israeli settlements

– Fears of wider economic boycott

Yedioth Ahronoth said the growing number of countries supporting restrictions has “caused significant concern in Israel,” not because of the relatively limited volume of trade from illegal settlements, but because officials fear the measures could discourage European importers from altogether purchasing Israeli products.

“Under the new Dutch rules, importers of products originating in settlements could face up to six years in prison,” it added.

Israeli officials and business representatives fear some Dutch companies may choose to avoid Israeli goods entirely rather than verify whether individual products were manufactured inside Israel or in illegal settlements.

They warn that it “could effectively create a quiet, broader boycott.”

“The concern is that importers unwilling to assume the legal risk or administrative burden of establishing where Israeli goods were produced will simply stop purchasing them,” said the newspaper, adding that Israeli officials believe the secondary effects could have serious consequences for the economy as a whole.

The newspaper noted that Europe has long opposed Israeli settlement expansion, “but growing attention to attacks by extremist settlers against Palestinians has given fresh momentum to governments seeking punitive measures.”

Images of Israeli occupiers entering Palestinian villages and reports of violence “have intensified European pressure,” while inflammatory statements by far-right National Security Minister Itamar Ben-Gvir and Finance Minister Bezalel Smotrich “have further fueled criticism,” it said.

“From Israel’s perspective, the failure to effectively address reported incidents of settler violence has created a political boomerang: Extremists in the West Bank are strengthening the case of European governments and activists already opposed to settlements,” it said.

The occupied West Bank has witnessed escalating attacks by occupiers against Palestinians and their property, including incursions into towns and villages, and assaults on residents, vehicles and homes, under the protection of Israeli forces.

Yedioth Ahronoth warned that the potential economic consequences could eventually affect not only occupiers and companies operating in the West Bank, but the Israeli economy as a whole if importers begin viewing all Israeli products as potentially subject to restrictions.

READ: Trump allies push ‘Israel First’ retaliation against UK at Americans’ expense

– Coordinated initiative viewed as failure

The newspaper said domestic political considerations played a role in Britain’s decision, according to Israeli assessments, as the Labour government faces pressure from elements of its political base; “however, the more consequential development was Britain’s ability to assemble a coalition of 12 countries behind the initiative.”

The timing added another dimension to the controversy because the measures came during Israel’s election campaign.” Some Israeli political figures argue that international pressure on settlements could strengthen Prime Minister Benjamin Netanyahu and his right-wing allies electorally, and British officials had been warned about that possibility,” said the newspaper.

Nevertheless, the newspaper concluded that the decision by Britain and the 11 other Western countries was viewed “not only as a diplomatic setback but as a significant failure by Israel to prevent a coordinated international initiative.”

Palestinians warn that Israel is paving the way for formal annexation of the West Bank through army raids and attacks by occupiers, undermining the possibility of establishing a Palestinian state as stipulated in relevant UN resolutions.

This work by Middle East Monitor is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

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Tag: a “diplomatic setback and a significant failure”

UK sanctions on illegal settlements mark diplomatic setback, major failure for Netanyahu: Israeli report

– Fears of wider economic boycott

– Coordinated initiative viewed as failure