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Israel sets deadline for Britain to close consulate as settlers warn of sanctions hit - Finance news and analysis from Global Banking & Finance Review
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Israel sets deadline for Britain to close consulate as settlers warn of sanctions hit

Published by Global Banking & Finance Review

Posted on September 9, 2026

4 min read

· Last updated: September 9, 2026

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Israel Retaliates Against UK Sanctions With 30-Day Consulate Shutdown Demand

Israel's Response to Western Sanctions and Its Impact

By Alexander Cornwell and Rami Amichay

TEL AVIV/PSAGOT, West Bank, Sept 9 (Reuters) - Israel has given Britain 30 days to close its East Jerusalem consulate in response to sanctions on goods from settlements, a measure Britain's leader said on Wednesday was needed to "stand against injustice" in the occupied West Bank.

In the West Bank, where Israeli settlements have eaten into territory Palestinians seek for a state, settler business owners said the sanctions — announced on Tuesday by Britain, France and Canada — would dent their revenues and at least one said they could force him to close his date farm.

The sanctions are among the strongest collective actions taken by Western countries that Israel once counted as close allies, highlighting its growing isolation over the war in Gaza and expansion of settlements in occupied territory.

Diplomatic Measures and Political Reactions

ISRAEL SETS DEADLINE FOR BRITAIN TO CLOSE CONSULATE

Two Israeli officials and two other sources familiar with the matter said London had been given 30 days to close its East Jerusalem consulate, which represents Britain in Jerusalem, the West Bank and Gaza on Palestinian issues. 

Israel has also barred 12 British politicians from visiting the country, told British officials and diplomats in the West Bank and a Gaza coordination centre in Israel to leave, and said Britain can no longer train Palestinian security forces in the West Bank.

It has not yet announced actions against France or Canada, which joined Britain in saying they would halt trade with settlements, or against nine other countries that endorsed the UK sanctions.

Although the UK sanctions were widely anticipated, Israeli parliamentary opposition leader Yair Lapid said on Tuesday that "no one knew" the other countries were going to endorse the move.

International and Domestic Responses

Speaking before Britain's parliament, Prime Minister Andy Burnham said Britain had long endorsed the two-state solution for the Israeli-Palestinian conflict, but that words needed to be backed by action.

"We will always stand with the underdog and take what action we can to support them," he said.

There has so far been a muted response from the United States, with Secretary of State Marco Rubio saying Washington did not want to see "anything destabilising" in the West Bank while declining to specifically comment on the UK sanctions.

The U.S. ambassador to Israel, Mike Huckabee, a staunch supporter of Israel, has condemned the sanctions and accused the British government of "Jew hate". U.S. President Donald Trump has not commented on the move.

Israeli leaders have described the sanctions as "morally distorted". Gideon Sa'ar, Israel's foreign minister, accused the UK of "blatant interference in the affairs of a sovereign state and its electoral process". Israel is due to hold a general election on October 27.

Economic Impact on Israeli Settlements

'IF I CAN'T SELL TO EUROPE, I NEED TO CLOSE THE BUSINESS'

Much of the world views Israel's settlements as illegal under international law. Prime Minister Benjamin Netanyahu's government has overseen a rapid expansion of small settler outposts, some of which have perpetrated violence against Palestinians.

Israel rejects the assertion that the settlements are illegal, viewing the West Bank as disputed territory to which it holds biblical ties.

Diplomats widely regard the sanctions as an important but symbolic step, with goods from Israeli settlements making up only a fraction of Israel's exports.

Settler Businesses and Export Challenges

Still, Israelis working in West Bank settler agriculture businesses told Reuters the sanctions would bar their products from important markets in Europe.

Yaakov Berg, head of the Psagot Winery near the Palestinian city of Ramallah, said Britain made up a big market for the winery, which exports around 60% of its wine. Israeli and Palestinian rights groups say the winery was established on privately owned Palestinian land.

Berg said the sanctions were a reflection of antisemitic hate, something Britain and others reject.

"Sometimes you suffer. Sometimes you lose some money. That's okay with us. We are not going to change the truth and who we are because of a few dollars," Berg said.

Impact on Palestinian Workers

In Kibbutz Almog, a Jordan Valley settlement south of the Palestinian town of Jericho, one of the area's many settler date farmers, 59-year-old Moses Gazi, said the sanctions could end up hurting the many Palestinians he employs on his farm.

"If I can't sell my dates to Europe, I need to close the business. I close the business, each of (the Palestinian workers) has something like three, four, five kids. What are they going to do?" he said.

Reporting Credits

(Reporting by Alexander Cornwell; Additional reporting by Paul Sandle in London; Writing by Angus McDowall and Rami Ayyub; Editing by Michael Perry and Aidan Lewis)

Key Takeaways

  • Israel retaliates to settlement sanctions by demanding closure of UK consulate in East Jerusalem and expelling British diplomats and politicians—escalating bilateral tensions. (investing.com)
  • The sanctions by the UK, joined by France, Canada and nine other countries, target imports from Israeli settlements and are seen as primarily symbolic given their small share in Israel’s export economy—but signal deepening isolation over settlement expansion. (investing.com)
  • Domestic reactions vary: settler leaders vow to expand communities in defiance, while UK and European voices frame the move as vital to defend two‑state solution and human rights. (thenationalnews.com)

References

Frequently Asked Questions

Why did Israel order Britain to close its East Jerusalem consulate?
Israel is retaliating against British sanctions on goods from Israeli settlements in the West Bank and has given Britain 30 days to close its East Jerusalem consulate.
What are the new British sanctions targeting?
The British sanctions target goods produced in Israeli settlements in the West Bank, aiming to block their entry into the UK market.
How will the sanctions impact Israeli settler businesses?
Settler business owners say the sanctions will decrease revenues and could potentially force some operations, like date farms, to close due to lost export markets.
Has Israel responded similarly to other countries imposing sanctions?
As of now, Israel has not announced actions against France, Canada, or other countries that joined the UK in imposing sanctions on settlement goods.
What has been the response from the United States regarding the UK’s sanctions?
The US response has been muted, with officials avoiding specific comments, though the US ambassador to Israel condemned the British sanctions.

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