EU said gearing up to label all Israeli products, halt collaborations if E1 settlement construction begins

The European Union is preparing a package of sanctions against Israel if it goes through with its plan for a major settlement construction in the particularly controversial E1 area of the West Bank, Channel 13 news reports.

The government on Tuesday issued a tender for the construction of seven residential compounds housing 1,234 housing units in the E1 area east of Jerusalem, where Israeli settlement activists seek to divide the West Bank.

The network reports, citing two Western diplomats, that the EU has devised a list of initial sanctions if the construction begins, which the United States doesn’t oppose.

It is said to include labeling products from Israel — not only from West Bank settlements — as well as scaling down academic collaborations and halting certain security and diplomatic collaborations.

The E1 expansion connects the Jerusalem and Ma’ale Adumim areas, while seemingly scuttling the prospect of a contiguous Palestinian presence between the population centers of Bethlehem, East Jerusalem and Ramallah — long considered the basis for a Palestinian state.

The project was frozen for long years amid fierce opposition from the international community, including past US administrations, which feared that building a new settlement neighborhood on the mostly empty tract of land would rule out the establishment of a contiguous, viable Palestinian state.

The housing units in the tender are some of the roughly 3,400 E1 housing units that were greenlit in August 2025. Finance Minister Bezalel Smotrich lauded the E1 expansion plan at the time, saying it “practically erases the two-state delusion” by splitting up the territory that would be slated for a Palestinian state.

The project was slammed yesterday by UK Secretary of State for Foreign and Commonwealth Affairs Ed Miliband, who called it “unacceptable and destructive” and threatened action.

Today, far-right ministers Bezalel Smotrich and Itamar Ben Gvir hit back, with the latter tweeting in English that “someone should update Ed that the British Mandate for the Land of Israel ended in 1948 and that Israel is an independent state.”

He added: “Perhaps instead of playing make-believe about the Mandate era, he ought to look out of the window at his London, which is rapidly turning into an Islamic Caliphate.”

Smotrich similarly said the British Mandate “is over” and that he wouldn’t accept “dictates from foreign countries” or change course due to “threats and sanctions,” casting the project as a national security necessity to prevent danger to the state and “realize our historic and biblical right to our ancestors’ land.”