LONDON (Reuters) -Britain on Tuesday paused free trade talks with Israel, summoned its ambassador, and announced further sanctions against West Bank settlers after Prime Minister Keir Starmer said he was horrified by the military escalation in Gaza.

The Israeli military announced the start of a new operation last week and Prime Minister Benjamin Netanyahu has said Israel would take control of the whole of Gaza.

Israel has blocked the entry of medical, food and fuel supplies into Gaza since the start of March and international experts have warned of looming famine.

Foreign minister David Lammy said the offensive was not the way to bring remaining hostages home, called for Israel to end the blockade of aid and condemned what he called "extremism" in some sections of Israel's government.

"We cannot stand by in the face of this new deterioration. It is incompatible with the principles that underpin our bilateral relationship," Lammy told lawmakers.

"Frankly, it's an affront to the values of the British people. Therefore, today, I'm announcing that we have suspended negotiations with this Israeli government on a new free trade agreement."

Britain, in a joint statement with France and Canada on Monday condemned the expansion of Israel's military operations in Gaza and called for restrictions on aid to be lifted.

The trio said they would take "further concrete actions" should Israel's fresh offensive not cease.

"I want to put on record today that we're horrified by the escalation from Israel," Starmer told parliament earlier on Tuesday.

"We repeat our demand for a ceasefire as the only way to free the hostages, we repeat our opposition to settlements in the West Bank, and we repeat our demand to massively scale up humanitarian assistance into Gaza."

Britain also sanctioned a number of individuals and groups in the West Bank who it said had been linked with acts of violence against Palestinians.

The move comes after Britain imposed sanctions on a number of settlers and settler organisations in 2024, targeting individuals and groups which it said had sponsored violence against Palestinian communities in the West Bank.

Most countries deem Jewish settlements built on land Israel occupied in a 1967 Middle East war as illegal, and their expansion has for decades been among the most contentious issues between Israel, the Palestinians and the international community.

"We are demonstrating again that we will continue to act against those who are carrying out heinous abuses of human rights," Lammy said.

Israel's ground and air war has devastated Gaza, displacing nearly all its 2.3 million residents and killing more than 53,000, according to Gaza health authorities.

Netanyahu has said his country was engaged in a "war of civilization over barbarism" and vowed it would "continue to defend itself by just means until total victory."

(Reporting by Sachin Ravikumar and Sarah Young, writing by Sam Tabahriti and Alistair Smout; Editing by Kate Holton and Conor Humphries)