London MPs were among those banned from Israel as Britain announced new sanctions on illegal settlements in the West Bank.

Foreign Secretary Ed Miliband triggered a diplomatic row when he accused the Israeli government of turning a blind eye to the “ethnic cleansing” of Palestinians.

Imports will be barred from illegal settlements in the Occupied Palestinian Territories and sanctions placed on individuals and firms providing services to settlers.

Mr Miliband announced the move as part of a reset in the way the Labour Government will deal with Benjamin Netanyahu’s administration.

Both Israel and the US criticised the UK’s new stance.

Israel announced its own counter measures, which include the UK’s consulate in Jerusalem being shut and 11 MPs and a campaigner being banned from entry to the country.

Three London MPs - former Labour leader Jeremy Corbyn, ex-shadow chancellor John McDonnell and veteran MP Diane Abbott - were among those who will barred from Israel.

Responding, Mr Corbyn said he would “keep speaking up for peace, freedom and justice for the Palestinian people” and “Israel’s genocide cannot go unpunished”.

Mr Miliband said the British Government believed the occupation of the West Bank as a whole was unlawful, going beyond the previous position that only described the settlements themselves as illegal.

He added that there was increasing evidence Israel had committed war crimes in Gaza.

The reset in Britain’s approach under new Prime Minister Andy Burnham has already prompted a backlash from Donald Trump’s White House and Benjamin Netanyahu’s Israel.

The Israeli retaliation came after Mr Miliband told the Commons that a “new approach” was necessary because plans for the E1 development in the West Bank would render a two-state solution “unviable” by “cutting through the heart of Palestine”.

He said more settlements had been approved under the four years of Mr Netanyahu’s government than in the previous 20 years, and settler terrorism in the West Bank was “rampant”.

“The British government agrees that there is ethnic cleansing of Palestinians in areas of the West Bank – perpetrated by settler terrorists,” Mr Miliband told the Commons.

“And 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.”

Announcing an import ban on goods from illegal settlements, he added: “I do not believe the British people want us supporting the occupation by accepting products from settlements in our shops and supermarkets.”

A new comprehensive sanctions regime will target companies and individuals providing services such as financing and construction for the settlements.

There will also be a ban on advertising in the UK of illegal settlements.

Legislation for the new regime could take up to nine months to put in place, Mr Miliband said, but he promised immediate sanctions against “extremist settlers who have supported or incited acts of violence”.

France and Canada also moved to ban goods from the settlements as part of a co-ordinated international action.

In a joint statement, the Prime Minister, France’s Emmanuel Macron and Canada’s Mark Carney said: “The time has come to take further action to uphold our commitment to protect the two-state solution, our interests and to stand up for our values, before it is too late.”

Mr Miliband said the Government would also now refuse all applications for the export of weapons and equipment that would “materially contribute to the occupation”.

Turning to Gaza, the Foreign Secretary said there had been “the most unimaginable trauma and suffering” which was “a stain on the conscience of the world and of this country too”.

In a criticism of Sir Keir Starmer’s administration, in which he served, Mr Miliband said the new Prime Minister was “right to say that the Labour government has not done enough in the face of what is happening”.

The Foreign Secretary acknowledged Israel had “the right not to live in fear of vile terrorism” and to defend its territory and people following the Hamas attacks on October 7, 2023.

“But that cannot justify what has happened in Gaza,” he said.

The Foreign Secretary said events in Gaza, including the actions of the Israel Defence Forces (IDF) had been examined by organisations including the UN Independent International Commission of Inquiry.

“The conclusions of these reports represent increasing evidence that war crimes appear to have been committed,” he said.

“And we support legal processes to determine this.”

Mr Miliband, who described himself as a “proud British Jew”, made clear he was “unwavering” in his support for the State of Israel and “our argument is with the conduct of its government”.

Hitting back, Israeli foreign minister Gideon Saar said: “The British move is morally distorted and constitutes blatant interference in the affairs of a sovereign state and in its electoral process.”

Along with Mr Corbyn and Ms Abbott, the entry bans will apply to Your Party’s Zarah Sultana, Labour’s Naz Shah, John McDonnell and Richard Burgon, Green MPs Hannah Spencer, Carla Denyer, Sian Berry Ellie Chowns and Adrian Ramsay.

The sole non-MP hit with the entry ban is Fahad Ansari, director of the self-described “anti-Zionist” Riverway to the Sea organisation.

Other retaliatory measures announced by Israel included the removal of British representatives from the International Gaza Support Centre and the ending of British training for Palestinian Authority forces.

US Ambassador to Israel Mike Huckabee called the UK’s move an “irrational action”.

“I feel like it’s discrimination against the Israeli government. It’s a discrimination against the Jewish people,” he told the BBC’s Today programme.

He added: “I also would tell you that I don’t know if they have thought it 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.”

Shadow foreign secretary Tom Tugendhat warned that the trade ban would not work and the sanctions could bolster the chances of hardliners in Israel’s election.

The Jewish Leadership Council warned the ban on goods from settlements “risks becoming a de facto boycott of Israel” and claimed Mr Miliband was “yielding to pressure from the most extreme elements of British society”.

“The left-wing and Islamist extremists the Government is trying to appease will never be satisfied, and no responsible government should bend to their demands,” a JLC spokesman said.