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UK plans policy reset on Israel as Israeli minister warns of retaliation

Foreign Secretary Ed Miliband pledges restrictions on British business involvement in West Bank settlements following Israel's E1 housing tenders.

Updated Sep 1, 2026 · 20:25 UTC2 reports

The short version

  • UK Foreign Secretary Ed Miliband announced an upcoming policy reset aimed at preventing British businesses from financing, constructing, or advertising West Bank settlements.
  • The policy shift follows Israel's decision to open tenders for roughly 1,200 homes in the strategically sensitive E1 corridor east of Jerusalem.
  • Israeli Foreign Minister Gideon Sa'ar warned that Israel will retaliate against Britain if new sanctions or actions are imposed.
  • The UK government is scheduled to reveal its specific package of policy and economic measures in the coming weeks.

Key facts

  • In his initial address to Parliament as foreign secretary, Ed Miliband announced plans to introduce a comprehensive reset of UK policy on Israel in the coming weeks.[BBC News · The Guardian]
  • The British government is reviewing mechanisms to stop UK firms from financing, constructing, or marketing new settlements in the occupied West Bank.[BBC News · The Guardian]
  • Israel initiated bidding tenders for approximately 1,200 residential units in the E1 area between East Jerusalem and Ma'ale Adumim.[BBC News · The Guardian]
  • UK Prime Minister Andy Burnham and Miliband argued the E1 development is unlawful under international law and threatens the viability of a two-state solution.[BBC News · The Guardian]
  • Israeli Foreign Minister Gideon Sa'ar stated that Israel would respond in kind if the UK takes measures against it.[BBC News · The Guardian]
  • The United Kingdom joined the European Union and 20 other nations in issuing a joint declaration designating the E1 development project unacceptable.[The Guardian]

What remains uncertain

  • The precise legal and regulatory mechanisms the UK will deploy to restrict company involvement or ban trade linked to settlements remain unspecified.[The Guardian]
  • The exact retaliatory actions or diplomatic tools Israel might use against Britain have not been detailed.[BBC News · The Guardian]

Sources