A few days after the British government barred public institutions from boycotting Israel, British Prime Minister David Cameron severely criticized the Netanyahu government's policy and said that construction in East Jerusalem settlements is "genuinely shocking."

The British prime minister was speaking during a parliamentary question period in response to a query from opposition Labor MP Imran Hussain, who asked: "Does the prime minister agree with me that illegal settlements and constructions are a major roadblock that hinder peaceful negotiations?" After Hussain described a visit he made to a Palestinian family in the Old City of Jerusalem, whom he claimed was fighting eviction by Jewish settlers, Hussain also asked what the British government was doing “to help prevent the infringement into Palestinian lives and land."

Cameron replied: “I am well-known as being a strong friend of Israel, but I have to say the first time I visited Jerusalem and had a proper tour around that wonderful city and saw what has happened with the effective encirclement of East Jerusalem – occupied East Jerusalem – it is genuinely shocking.”

He added: "What this government has consistently done and gone on doing is saying yes, we are supporters of Israel, but we do not support illegal settlements, we do not support what is happening in East Jerusalem and it’s very important that this capital city is maintained in the way that it was in the past.”

Open gallery view File Photo: Prime Minister Benjamin Netanyahu (L) with U.K. Prime Minister David Cameron in London. Credit: AP

Cameron's remarks were met with surprise in Jerusalem. Senior Israeli officials noted that his criticism may have been meant to balance his government's recent decision against boycotts of Israel.

According to the guidelines, any boycott decision by a public body in the U.K. must be in line with the foreign policy of the British government.

The new, mandatory instructions, which forbid local boycotts in procurement and the issuing or awarding of tenders, apply to all countries belonging to the World Trade Organization, including Israel.

They were issued last Wednesday, to all bodies and organizations in Britain that sign agreements, publish tenders or make purchases using public funds. They apply primarily to government offices and agencies, local councils and other public bodies.

"Public procurement should never be used as a tool to boycott tenders from suppliers based in other countries, except where formal legal sanctions, embargoes and restrictions have been put in place by the UK Government," according to the new guidelines.

"There are wider national and international consequences from imposing such local level boycotts. They can hinder Britain’s export trade, and harm foreign relations to the detriment of Britain’s economic and international security."

The government stressed in a statement that the guidance "complements" the guidance issued to businesspeople about 18 months ago, in which it cautioned against doing business with settlements in the West Bank, East Jerusalem and the Golan Heights or the purchase of real estate in settlements, which, it said, could expose them to legal claims or financial damage