Israel hit back today after Ed Miliband unveiled sanctions on West Bank settlements - with the US also poised to wade in.  

The Foreign Secretary lashed out at 'ethnic cleansing' by 'terrorists' in the disputed areas as he announced a package of measures banning imports.

Companies are set to be banned from helping construct or selling properties in the settlements, in sanctions being coordinated with France and Canada. 

The move comes after Labour formally triggered a by-election in Keir Starmer's Holborn & St Pancras seat, where Palestine is set to be a major issue. 

There was an immediate storm of protest, with Israel declaring it will shut the British consulate in Jerusalem. Ministers also backed Argentina's campaign to seize control of the Falklands.

Andy Burnham informed Donald Trump of his plans in a call last night, with the Government bracing for the president to respond publicly. 

US ambassador to Israel Mike Huckabee accused the UK of 'Jew hate' and 'discrimination'.

In further escalation, Florida congressman Randy Fine has warned that the state has a law that would ban British imports in retaliation.

Kemi Badenoch and shadow foreign secretary Tom Tugendhat criticised the 'performative' nature of the restrictions, voicing concern that access to crucial intelligence could be disrupted  

There is also disquiet in Labour ranks, with one MP raising alarm about 'a real risk of increased chances of attacks on the British Jewish community'.

Labour has been under intense pressure from activists to toughen its position on Israel after losing votes to the Greens and pro-Gaza independents.

Around 160 settlements have been built by Israel since its occupation of the West Bank during the Six-Day War in 1967. 

Around 770,000 live in them, up from an estimated 270,000 in 1993. 

Concerns have intensified following Israel's recent decision to open tenders for 1,200 homes east of Jerusalem, which would divide the West Bank.

Mr Miliband told MPs he is a 'proud British Jew', but insisted he had a 'deep sense of shame' about what had unfolded in Palestine.

He said the two-state solution is the 'North Star' of the Government's policy. 

Mr Miliband said the UK is 'no longer prepared to be bystanders to further suffering and to the destruction of the two-state solution'.

In a statement to MPs, he accused Israeli settlers of 'terrorism' - and suggested Mr Netanyahu's government was guilty of 'war crimes' in Gaza.

Announcing plans for new sanctions coordinated with France and Canada, he said: 'Britain is not silent in the face of deep injustice and nor is it powerless.'

He said Labour would ban goods produced in the settlements. And he said firms providing services for 'settlement expansion' would face sanctions. This could include services covering construction, infrastructure, financing or real estate.

Advertising property in settlements will be banned in the UK.

The sale of arms to Israel that 'materially contribute to the occupation' will also be banned.

'I do not believe that the British people want us supporting the occupation by accepting products from settlements in our shops and supermarkets,' he said.

The sanctions will not be applied to other aspects of trade with Israel.

Mr Miliband said the sanctions plan was designed to 'salvage the only course for peace and security for Israelis and Palestinians- the two-state solution'.

He accused Israeli settlers of 'rampant terrorism', saying Labour believes there is now 'ethnic cleansing of Palestinians in areas of the West Bank, perpetrated by settler terrorists'.

'All too often the Israeli government has turned a blind eye to this and worse, members of it have made statements and taken actions to support the forced displacement of Palestinians,' the Cabinet minister said.  

He said Israeli occupation of areas of the West Bank was 'unlawful'

Mr Miliband condemned the October 7 Hamas attacks on Israel - and said the country had the right 'not to live in fear of vile terrorism'.

But he said Israel's right to self-defence 'cannot justify what has happened in Gaza'.

He said independent reports of Israel's actions, such as blocking aid, 'represent increasing evidence that war crimes appear to have been committed'.

Mr Miliband, whose parents fled the Nazis, said he was 'proud of my Jewishness and unwavering in my support for the state of Israel'.

He insisted there was 'absolutely no contradiction' between that and his backing for a Palestinian state.

He said he felt a 'deep sense of shame about what has unfolded in Palestine under the eyes of the international community'.

Mr Miliband said Israel's actions in Gaza were 'a stain on the conscience of the world and this country too'.

He acknowledged that Britain is experiencing 'rising antisemitism', with the life of ordinary British Jews 'deeply affected by the climate such hate creates'.

He insisted the government was committed to tackling antisemitism, despite warnings his latest action will make it worse.

Mr Burnham has said the Israeli proposals could 'imperil or end' the dream of a two-state solution, which successive British governments have supported for years. In a call with Mr Trump last night he reiterated his commitment to a two-state solution.

But Itamar Ben-Gvir, the hardline Minister of National Security of Israel, used the disputed Argentinian name for the Falklands as he wrote on X: 'It's time for the State of Israel to publicly recognize that the Malvinas Islands are Argentine territory under occupation, which the British violently steal from the Argentine people.

'The British are not content with merely occupying the territory; they also carry out oil drilling there and steal the money from the Argentine people.

'I call upon Prime Minister Benjamin Netanyahu to recognize Argentina's sovereignty over the Malvinas Islands and to impose sanctions on Great Britain as long as the occupation continues.'

Last week Argentine president Javier Milei reiterated the country's 'sacred' claim to the territory, which it failed to seize in the 1982 Falklands War. 

Mr Milei has announced sanctions on oil exploration around the islands, encouraged by his ally Donald Trump pledging to 'review' US neutrality on the dispute. 

Britain has been adamant that sovereignty of the Falklands is not in doubt. 

In a referendum of islanders in 2013, 99.8 per cent voted to stay British, with a turnout of 92 per cent. 

Senior Labour MP Dame Emily Thornberry slapped down Mr Ben-Gvir in the Commons.

She pointed out that an Israeli oil company had just been sanctioned by Buenos Aires over a contract with the islands, and suggested he was too distracted by his ongoing effort to find 'new ways to inflict ever more cruelty on the Palestinian people' to do his research properly.

Israel's finance minister Bezalel Smotrich called for the expulsion of the British ambassador.

'We will not be a doormat trampled by an antisemitic government, in a country conquered by radical Islam, trying to save itself from economic and social decline by attacking Jews and the State of Israel,' he said.

'The British Mandate in the Land of Israel is over.'

Israeli president Isaac Herzog said Britain should focus on 'dialogue' not sanctions.

'If this happens – and other nations may join – I believe it will prove to be a grave miscalculation, a decision that will fall on the wrong side of history,' he said in a statement. 

Although Mr Trump has yet to comment, Republican Mr Fine posted on social media: 'As the British government considers forcing British companies to boycott portions of Israel, it should be aware that a Florida law that I passed as a member of the Legislature would ban any British company forced to comply from doing business with any state or local government in Florida. 

'It would also end any British business participating in that boycott from doing any business in Florida if it needed any official interaction with state or local government to operate (permits, tax collection). 

'Florida is one of Britain's largest trading partners. They should understand that their vanity project in support of Muslim terror could cost them billions of dollars. 

'And for those who doubt the power of this policy, it was this same law that broke Airbnb's misguided effort to boycott portions of Israel in 2019. 

'They realized that this law would have bankrupted their company. Florida has made it clear. Any company — or nation — that boycotts Israel is boycotted by Florida.' 

Mr Huckabee said: 'I feel like that it's a discrimination against the Israeli government, it's discrimination against the Jewish people and I don't understand the rationale of it.'

He added: 'I don't know if they have thought through, it's like throwing a stone and not having an idea of where it's going to land.

'And I realise, look, the UK is a sovereign country, they can do what they want, but so is the US.'

He told BBC Radio 4's Today programme there would be 'implications' for Britain.

'For example, 25 per cent of pharmaceuticals that are used in the UK are made in Israel. Are they willing to give those up? It looks like they are.

'Are they willing also to do great damage to any Brits who are doing business in a number of states in the US.

'I don't know what all of the national sanctions or repercussions or retaliations will be from the US, hasn't been announced yet.

'But I do know that there are a number of states. Let me mention one, one of the largest US states, Florida, that has a law that if this action is taken, then Brits will not be able to do business with any company or business in Florida.'

Writing in the Jewish Chronicle, Mrs Badenoch said: 'Labour has developed a strange moral confusion in which it can speak solemnly about antisemitism one day while driving to an increasingly hostile climate around Israel the next.

'Criticism of an Israeli government is not antisemitic. No democratic government should be beyond criticism, and Conservatives have disagreed with Israeli governments before.

'But Labour's obsession with Israel is rooted in UK politics. It's got less to do with peace in the Middle East, and more to do with trying to keep the peace in the Labour party.'

Mr Tugendhat told the Commons: 'We do agree that illegal settlements are wrong.

'We all agree that groups of settlers have been guilty of outrageous abuses of ordinary Palestinians and crimes against innocent civilians.

'We agree that some Israeli ministers have indulged in hateful propaganda and incitement – we agree that the current path is leading Israelis and Palestinians towards a darker, more dangerous future.'

Mr Tugendhat also said: 'This isn't about Israel alone and it certainly isn't about reducing the complexity of the region to a single sentence. Sadly, the Government is in the process of doing just that.'

He complained that the Government had recognised Palestine 'in contravention of the Montevideo Convention' and was now 'enacting policies that the Foreign Office knows won't work'.

The Tory frontbencher said Labour ministers had previously warned that 'the economies of Palestine and Israel are too interconnected' for a ban on goods for illegal settlements to work.

'The Israeli election is in just seven weeks and many have argued, correctly, that this action will help the extreme candidates' campaigns and not help those who are making the moderate argument for a united Israel,' he added.