Israel has the tools to limit the damage from any economic boycott, Intelligence Minister Yuval Steinitz said Thursday, downplaying fresh warnings that the country’s economy would be badly hurt if US-led peace talks with the Palestinians fail.

Israel “has the tools to prevent boycotts,” Steinitz told Israel Radio. He said his office is preparing a campaign “against the boycotts and delegitimization of Israel” but did not elaborate.

He also insisted that an “erroneous” deal that compromises Israel’s security would do more economic damage than international opprobrium.

The comments reflect how boycott concerns have become central to Israel’s public discourse, as a small but growing number of European businesses have limited trade recently with Israeli firms involved in West Bank settlements.

Finance Minister Yair Lapid, who has repeatedly found himself in public spats with Steinitz during his time in office, said Wednesday that Israel would become increasingly isolated and lose markets in Europe if it failed to strike an agreement with the Palestinians.

Based on an evaluation prepared by the Finance Ministry’s chief economist, Lapid said that even a low-scale boycott would “hit every Israeli citizen directly in his pocket.” The cost of living would rise, and education, security, health, and welfare budgets would be slashed, he said.

Furthermore, exports would face a loss of NIS 20 billion ($5.7 billion), GDP would likely be lowered by NIS 11 billion a year, and 9,800 workers would be laid off immediately.

According to World Bank figures, Israel’s GDP was NIS 902 billion in 2011 ($258.2 billion).

“We must recognize that if the talks fail — and the world will believe they failed because of us — there will be a price, and it’s best we know what that price is,” Lapid said.

Lapid also dismissed claims by Economy Minister Naftali Bennett Tuesday that a Palestinian state would be an economic burden on Israel. A peace agreement would result in an added NIS 20 billion annually to the state budget, and potential growth of NIS 16 billion in exports, he maintained.

“Today Israel is more exposed economically than from a security perspective,” he added. “The security debate makes us forget occasionally the fact that our military is not a goal, it is a tool. It’s a tool that is meant to allow us to reach an agreement that will strengthen Israel’s economy and guarantee its future as a Jewish state.”

The finance minister’s remarks echoed those of US Secretary of State John Kerry last week at the World Economic Forum in Davos, Switzerland. Kerry pointed to the economic benefits Israel would reap from reaching a peace deal with the Palestinians, stating that Israel would have immediate diplomatic recognition and economic ties with the Arab and Muslim world and would potentially see a 2 percent increase in GDP per year.