The UK government is to set out new restrictions on buying goods made in Jewish settlements in the Israeli-occupied West Bank, the understands.
Foreign Secretary Ed Miliband is expected to outline the measures in the Commons on Tuesday, which could include restrictions on trade in agricultural products from settlements.
Last week, Miliband said he would unveil a “comprehensive reset” of the British government’s policy on Israel.
The Israeli government has previously warned it would retaliate if any new measures were introduced.
Settlements are illegal under international law, and recent months have seen a rise in violence towards Palestinians in the West Bank by settlers.
One minister told the : “The statement will be a complete reset of the nature of our Israel-Palestine relationship. It will all feel very different.
“It is not just about sanctions. We hope that this will finally achieve what those of us who have been working towards for two years over the Middle East have been working on.”
News has not seen the full details of the measures.
But Labour MPs who have been briefed on the plans believe the sanctions will target trade with illegal settlements. They believe that means the sanctions would cover both goods and services.
Prime Minister Andy Burnham confirmed to Labour MPs at their weekly parliamentary meeting on Monday night that Miliband would be making the statement, according to a number of MPs present.
The prime minister is also said to have told the meeting that he had briefed international leaders about plans in phone calls on Monday afternoon.
Burnham spoke to US President Donald Trump over the phone on Monday, during which the prime minister stressed the importance of a two-state solution in the Middle East.
An official account of the call released by No 10 did not specify that Burnham had briefed Trump on the sanctions, while the US – which is likely to strongly oppose the proposals – has not commented.
Speaking in July, Stephen Doughty – who was then Europe minister but has since been appointed Middle East minister – told the business select committee that existing powers to impose restrictions on settlements did not go far enough.
He said: “At the moment, we can sanction where there is evidence of it being linked to settler violence, but not, for example, in relation to a contractor working on the settlements. We need to expand our sanctions powers.”
While ministers are said to recognise that banning a relatively small quantity of mostly agricultural products is a largely symbolic gesture, the government is expected to frame this announcement as a major reset in Britain’s wider policy on Israel.
The expected announcement by the UK government comes after Israel opened up tenders for the construction of some 1,200 settlement homes in the so-called E1 area – a strategically important area east of Jerusalem. The plans have drawn widespread international condemnation.
Israel has held off on plans to build in the area for decades under global pressure.