Israel’s parliament, the Knesset, has passed a law that will force human rights groups that receive more than half their funding from abroad – including from European governments – to disclose it prominently in official reports.



Critics say the legislation will target about two dozen leftwing groups that campaign for Palestinian rights while excluding rightwing pro-settlement NGOs, who will not be required to reveal their often opaque sources of foreign funding.



The law requires groups to declare they are reliant on foreign funding in all dealings with officials, and on TV, newspapers, billboards and online.

The organisations likely to be affected include some of Israel’s most prominent and best-known rights organisations, including Breaking the Silence, B’Tselem, Peace Now and Yesh Din.



The bill, promoted by Israel’s rightwing justice minister, Ayelet Shaked, with the support of the prime minister, Binyamin Netanyahu, was passed by 57 to 48 votes following a lengthy and sometimes acrimonious debate on Monday.

The so-called “transparency bill” has been criticised in Israel and overseas.

A statement issued by the European Commission within hours of the passage of the new law condemned it for threatening to undermine Israel’s democracy.

“The reporting requirements imposed by the new law go beyond the legitimate need for transparency and seem aimed at constraining the activities of these civil society organisations,” the EU’s executive arm said.

“Israel enjoys a vibrant democracy, freedom of speech and a diverse civil society... This new legislation risks undermining these values.”

But the strongest condemnation came from the Israeli opposition leader, Isaac Herzog, who told reporters before the vote: “The NGO law … is indicative, more than anything, of the budding fascism creeping into Israeli society.”



The long-standing anti-occupation group Peace Now vowed to appeal against the law to the high court of justice, denouncing it as a “a blatant violation of freedom of expression”.



“It is a law whose only aim is to silence and mark those who dare to voice criticism of the government or against settlements,” the group said in a statement.



Defending the measure, Netanyahu said the law’s goal was “to prevent an absurd situation, in which foreign states meddle in Israel’s internal affairs by funding NGOs without the Israeli public being aware of it.”



After the final vote, he wrote on his Facebook page: “Unlike the left’s claims, the law’s approval will increase transparency, contribute to creating a discourse that reflects the Israeli public opinion, and will strengthen democracy.”

The law will compel the relevant groups to report their main source of income to the NGO registrar, publish it on their website and state it in relevant publications.

Earlier versions of the law had included the requirement that representatives of applicable NGOs must wear identifying tags and declare their funding sources when speaking at a parliamentary committee.

The head of the Arab Joint List political alliance, Ayman Odeh, said the law sought to “intimidate and wipe away the few organisations that act and fight in the public sphere for equality to the Arab public”.

In a statement, the New York-based New Israel Fund, which gives financial support to some of the groups most likely to be affected, said: “This legislation targets organisations working for human rights and democracy, while allowing ultranationalist organisations to keep their sources of funding hidden despite their claim that the law increases ‘transparency’. ”

The law does not specifically refer to leftwing organisations, but will apply to about 25 NGOs. Rightwing NGOs, such as those supporting Israel’s occupation of the West Bank, tend to rely on private donations, which the law does not cover.

Human Rights Watch said: “If the Israeli government were truly concerned about transparency, it would require all NGOs to actively alert the public to their sources of funding, not just those that criticise the government’s policies.”