The Obama administration said it does not support the portion of a new trade law that requires actions against entities that boycott goods manufactured in the West Bank.

“As with any bipartisan compromise legislation, there are provisions in this bill that we do not support, including a provision that contravenes longstanding U.S. policy towards Israel and the occupied territories, including with regard to Israeli settlement activity,” the White House said in a statement Thursday.

The United States does not recognize the West Bank as belonging to Israel.

The Trade Facilitation and Trade Enforcement Act, aimed at removing unfair barriers to competitive U.S. trade, is otherwise acceptable in its current form, the White House said, and the president will sign it. Versions of the bill were passed last year by both chambers, the U.S. House of Representatives passed a reconciled version in December and on Thursday the Senate passed it as well.

The bill, in a lengthy section on promoting U.S. Israel trade, requires non-cooperation with entities that participate in the boycott, divestment and sanctions (BDS) movement against Israel, and reporting on such entities. The section includes within its definition of an Israel boycott actions that would target businesses in “Israeli-controlled territories.”

The American Israel Public Affairs Committee in a statement praised the bipartisan slate of lawmakers who advanced the anti-BDS provision, although the statement did not specify inclusion of the problematic “Israeli-controlled territories” language.

“The provision puts the U.S. firmly on record opposing BDS (boycott, divestment and sanctions) and supporting enhanced commercial ties between the United States and Israel,” it said. “It further establishes new requirements for administration reporting on an array of global BDS activities, including the participation of foreign companies in political boycotts of Israel. The provision also provides important legal protections for American companies operating in Israel.”

Dovish pro-Israel groups, including J Street and Americans for Peace Now, had advocated for the removal of he “Israeli-controlled territories” language.

The European Union, over strenuous Israeli objections, last year adopted a policy requiring the labeling of goods manufactured in Israeli settlements, a practice that would facilitate the targeting of settlement businesses. The Obama administration last summer said it would not object to the policy.

U.S. policy since the 1990s has also required distinct labeling of products manufactured in the West Bank; however, unlike the E.U. regulations, the rule applies not only to settlements, but to goods manufactured throughout the territory, including by Palestinians. Additionally, the George W. Bush administration on at least two occasions issued orders overriding the requirement, allowing goods manufactured in the West Bank to be labeled as made in Israel.

Separately, a bipartisan slate of lawmakers on Thursday introduced legislation that would make it easier for state legislatures choosing to target BDS, authorizing the divestment of state monies from entities engaged in BDS.

The bill, sponsored by Sens. Mark Kirk, R-Ill., and Joe Manchin, D-W.V. in the Senate and Reps. Robert Dold, R-Ill, and Juan Vargas D-Calif., in the House, follows the passage recently of a bill in Illinois targeting BDS. “This bipartisan bill would authorize state and local governments in the United States to follow Illinois’s lead and divest from companies engaged in boycotts and other forms of economic warfare against Israel,” Kirk said in a statement.

The Illinois law specifies protections for companies operating in territories controlled by Israel, as do a number of other proposed bills circulating in legislatures throughout the country. A number of proposed state-level anti-BDS bills do not specify the territories.

Meanwhile, Rep. Ileana Ros-Lehtinen, R-Fla., and Sen. Ted Cruz, R-Texas, on Thursday introduced legislation that would shut down the Palestine Liberation Organization office in Washington until the Palestinian Authority has been proven to end incitement against Israelis, stops paying subsidies to the families of terrorists who are in jail or who have been killed, ends its bid to obtain statehood recognition in international forums outside the framework of negotiations with Israel and pulls out of the International Criminal Court, which is investigating war crimes charges against Israeli officials. Cruz is among the front-runners for the Republican presidential nomination.

The PLO has maintained an office in Washington since 1994, following the launch of the Oslo peace process.