Sixteen EU states have said products made by Israeli settlers should be marked in shops so that European consumers can boycott them if they want to.

The group - which includes France, Italy, Spain, and the UK - made the appeal in a letter, seen by EUobserver, to EU foreign relations chief Federica Mogherini on Monday (13 April).

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They said “EU-wide guidelines on the labelling of settlement produce/products … is an important step in the full implementation of EU longstanding policy in relation to the preservation of the two-state solution”.

They noted that “expansion of Israeli illegal settlements … threatens the prospect of just and final peace agreement”.

They add that EU consumers have a right to “not being misled by false information” and “confidence in knowing the origin of goods they are purchasing”.

They also say the retail code should be in the form of binding “legislation” and that it would “benefit” Palestinian exporters.

The initiative was co-ordinated by Belgium, whose foreign minister also signed the paper.

The other signatories are: Austria, Croatia, Denmark, Finland, Ireland, Luxembourg, Malta, Netherlands, Portugal, Sweden, and Slovenia.

An EU source said the idea will be discussed in the margins of Monday’s foreign ministers meeting in Luxembourg.

He noted that the retail code, which is being put together by the European Commission on the basis of existing consumer and trade legislation, isn’t ready yet.

“This letter comes after a similar one written to Mogherini’s predecessor [Catherine Ashton]. It’s just to check where we are with this and to make sure it stays on the agenda”.

The letter to Ashton, in April 2013, had 13 signatories.

The EU foreign service also said, in a statement on Friday, that “the issue of labelling is not new” and stems from a 2012 decision to “fully and effectively implement EU legislation applicable to settlement products”.

“This is not to be seen as sanctions towards Israel”.

For its part, Israel claims the settlements are legal and that their expansion isn’t to blame for lack of peace.

It also says EU interventions make Palestinians less willing to negotiate and come from deep-rooted anti-Semitism in Europe.

"I have a recommendation for them ... They can take a yellow badge and mark all the products from Judea and Samaria and the Golan Heights with a yellow badge", Israeli foreign minister Avigdor Lieberman told Israeli radio on Friday, referring to Israeli-occupied territories and the yellow badges which Nazis forced Jews to wear in WWII.

The EU is currently waiting for the US, Israel’s security sponsor, to decide whether to relaunch the Middle East peace process before the end of president Barack Obama’s second term.

But sources in Washington say personal relations between Obama and Israeli PM Benjamin Netanyahu are so toxic that prospects of a US initiative are low.