Britain is drafting a sanctions regime that would ban trade with Israeli settlements in the occupied West Bank, according to Bloomberg. The move follows Israel's decision to open bidding for more than 1,200 homes in the E1 area, according to the Jewish Telegraphic Agency.

On Thursday, France, Italy, Germany and Britain condemned the settlement project, according to France 24. It is the first time the four have moved together from statements toward concrete economic threats against Israel.

The E1 plan, green-lit by Israel last year, would build a corridor of settler homes that separates occupied and annexed East Jerusalem — home to a majority-Palestinian population — from the rest of the West Bank, per France 24. Palestinian negotiators have long warned the project would sever the West Bank's north from its south, undercutting the territorial contiguity a future Palestinian state would need.

Why it matters: a British trade ban on settlement goods, if enacted, would be the first sanctions-grade measure by a G7 power against Israeli policy in the West Bank — testing whether Washington stands with Israel or with its European allies at a moment when Gaza diplomacy is already strained.

Britain's plan would target goods produced in settlements rather than Israel itself — mirroring EU labelling rules already in place, but going further by restricting trade outright. No timeline for a final decision has been confirmed.