Britain and Israel: The Battle of Sanctions on Settlements: Who Will Win?
By Dr. Ibrahim Assalia
Journalist and Lecturer in Media Ethics
The confrontation between Britain and Israel over Israeli settlements in the West Bank has entered a more sensitive phase, after London moved from merely issuing political criticism to threatening broader economic and diplomatic measures. In response, the Israeli government has begun to warn that any new British sanctions will be met with countermeasures.
Where did the crisis begin?
The British position became clearer during 2026. London, in coordination with allied countries, imposed sanctions on individuals and entities accused of financing or facilitating settler violence in the West Bank, including asset freezes and other restrictions. The British government also tightened its guidelines for companies, requiring them not to conduct economic or financial activities in settlements that it considers illegal under international law.
But the biggest turning point came with the E1 settlement project. Britain, along with a wide range of European and other countries, considered the project a direct threat to the possibility of establishing a geographically contiguous Palestinian state and warned companies against participating in its tenders.
Why is Israel afraid of British sanctions?
The volume of British trade with Israel may seem limited compared to Israel’s economic relations with the United States and Europe as a whole, and therefore, British sanctions alone would not lead to the collapse of the Israeli economy.
But the problem for Israel is bigger than the volume of trade.
Britain is a country with significant diplomatic and legal weight, and any measures taken by London could set a precedent for the rest of Europe.
And therein lies the danger.
If the sanctions, imposed by Britain alone, become a collective European policy toward the settlements, companies, banks, and investors will become more cautious about dealing with settlement projects, not only for fear of sanctions, but also for fear of legal risks and damage to their commercial reputation.
And this is precisely what London is trying to push for: to gradually make the cost of economic activity in the settlements higher.
Israel is threatening to retaliate.
But Israel does not seem ready to accept British pressure without a response.
Israeli Foreign Minister Gideon Sa’ar warned that Israel has tools to retaliate if Britain takes action against it, while Finance Minister Bezalel Smotrich said that Israel is preparing countermeasures, both political and economic, should new sanctions be imposed.
Here, the conflict enters a phase of “mutual deterrence”: Britain says it has economic and diplomatic tools, and Israel says it has tools to retaliate.
But the question is: Which side can sustain this conflict for the longest period?
Britain’s Strength: The Alliance
London’s strongest card is not just British sanctions, but its ability to transform the issue into a shared European and international concern.
The August statement regarding the E1 project included Britain, France, Germany, Italy, the European Commission, and a large number of other countries, reflecting the broad international opposition to the project.
If the issue remains solely between Britain and Israel, Israel can likely absorb a significant portion of the pressure.
However, if the issue becomes:
Britain + France + Germany + other European countries + coordinated financial and trade measures
then Israel’s calculations become much more difficult.
But Israel has a stronger card: the United States.
The biggest problem for Britain is that Washington remains the most influential factor in the equation.
Even if London decides to take strong measures against the settlements, its impact will be limited if the United States remains opposed to expanding sanctions against Israel.
Therefore, Israel does not see London as its only adversary. The real battle is over the collective Western position.
Who will prevail?
The truth is that this is not a battle that can end with a complete victory for one side and a complete defeat for the other.
Israel can prevent Britain from imposing a rapid change in settlement policy, but Britain can raise the political and economic cost of settlements.
Therefore, the outcome can be divided into three levels:
Diplomatically: Britain is gaining ground, especially if it succeeds in building a broad European alliance.
Economically: British influence alone is limited, but it could become significant if it translates into a common European policy.
On the ground: Israel still has the greatest ability to impose facts on the ground, and therefore sanctions alone will not stop settlement expansion unless they are accompanied by broader international pressure.
The real battle has just begun.
The coming days and weeks will be crucial. Britain has already announced it is seeking further “concrete steps” against settlement expansion, while Israeli statements indicate its readiness to respond.
التاريخ 4-9-2026
