Deep divisions over the government's approach to Gaza were being aired in public today following the resignation of Baroness Warsi.

The reaction was particularly prevalent among Liberal Democrats, although Warsi warned yesterday that at least one other senior Conservative minister was on the verge of resigning over the British response to the attack.

Nick Clegg announced his support for a suspension of arms export licences to Israel, which would be imposed by Vince Cable's Department for Business.

"I think the question marks that Sayeeda Warsi has raised about the arms export licences which we issue to arms exporters selling to Israel are very serious ones and I share her concerns," Clegg said last night.

"The Israeli military operation overstepped the mark in Gaza - this outrageous spectacle of these three UN schools being hit by Israeli military action. That's why I believe that the export licences should now be suspended."

Clegg and Cable said the conditions of the British arms exports had been breached and should be suspended pending a wider review.

UK policy states that arms exports should not be used in the occupied territories or in any situation in which there is a risk they might be used to "provoke or prolong conflict within a country" or "be used aggressively against another country".

After Israel's 2009 incursion into Gaza – Operation Cast Lead - the Commons committee on strategic export controls found British arms exports had "almost certainly" been used in the attack.

Then-foreign secretary David Miliband told the Commons all future arms exports to Israel would be checked to make sure they abided by the rules. A review is currently being undertaken to check on the licences issued since then.

Clegg added: "I believe we will be able to make an announcement on this, finally, very shortly.

"It's taken a little bit longer than I'd like to have this agreed across government but I think it's very important that in response to clearly what appears to be disproportionate military action of Israel in Gaza, we should be suspending the arms export licenses that presently exist."

Former Liberal Democrat leader Paddy Ashdown offered to work hand-in-hand with Warsi to push for Israel to open up the blockade of Gaza and push for action at an international level.

The need to lift the blockade – which was a key demand of Hamas – is particularly acute since the conflict, with half the strip's 1.8 million population affected by a reduction in water supplies.

There is an urgent need for repairs to health facilities and materials to rebuild the homes of thousands of families.

Gazans currently only get approximately three hours of electricity a day, with water and sanitation services and hospitals badly affected.

"Like you, I believe the UK must stand firm on upholding international law," Ashdown wrote.

"The UK’s international reputation suffers if we do not. I therefore understand the frustrations you voiced in your resignation letter.



"Of course Hamas' actions in indiscriminately firing rockets into Israel are plainly illegal. But Israel’s response in Gaza, is clearly disproportionate and has resulted in the collective suffering of innocent men, women and children."

Ashdown's letter is intended to maximize Downing Street's discomfort at the Warsi resignation. In her letter she singles out for criticism the decision to sack Dominic Grieve, the former attorney general who is a firm supporter of the International Criminal Court, during the reshuffle last month.

Many critics of the Israeli action are hoping to bring a case against the country for the shelling of several UN schools and other actions which led to civilian deaths.

The Commons international development committee weighed into the debate with a report finding curbs on Palestinian imports, exports and movement were not "proportionate" and demanding action to restore water and electricity.

The cross-party committee, whose members visited Israel and the occupied territories earlier this year, said it was "shocked" by what it had seen in the West Bank city of Hebron.

"We saw a country whose people have known immense suffering now imposing conditions on their Palestinian neighbours which cause a different but very real suffering and often without real security justification," the report said.

"We saw Israel taking a range of actions that hinder Palestinian economic development and must, at the very least, cause deep resentment on the Palestinian side, even amongst the most moderate and pragmatic people, and so will actually worsen Israel's own security."

The growing chasm between the Lib Dem and Downing Street position was attacked by Labour's shadow foreign secretary Douglas Alexander, who said clarity was needed.

"The government's approach to the Gaza crisis has sadly been characterised by incoherence, division, and misjudgement," he said.

"Following Baroness Warsi's resignation today, we now have the sorry spectacle of government policy coming apart rather than coming together in the face of this crisis.

"Of course ministers have a responsibility to reassure the British people that all UK arms export licences are rigidly tested against both the spirit and the letter of the consolidated criteria.



"But now it's time that the government spoke with one voice in the face of the continuing suffering."

Britain contributes roughly £10 million in arms exports to Israel, including component parts for sniper rifles and small arms, as well as F-16 combat aircraft and Apache helicopters.

But it is far more reliant on Israeli firms in its contract for drone technology, which are built in Britain by an Israeli parent company, and valued at nearly £1 billion.

With a contract for the drones lasting into 2040, the Ministry of Defence is likely to oppose any effort to complicate the extent of military cooperation between the two countries.

However, Amnesty International and the Green party have both argued for a ban on British arms exports to Israel. Yesterday, activists occupied and closed down an AV Engines Limited factory, a UK registered company owned by Elbit Systems, Israel's largest weapons company.

There were raised eyebrows in the Israeli press at the announcement yesterday, with liberal newspaper Haaretz saying: "While Warsi's resignation will have no effect on current British policy in the Middle East, it is a signal on how divisive Israel is now in the UK and the conflict's detrimental influence on Jewish-Muslim relations in Britain.

"Tens of thousands have taken to the streets each weekend of the last month in angry anti-Israel demonstrations, in which many of the participants were members of Britain's large Muslim community."

Foreign secretary Phillip Hammond, who is considered much more pro-Israeli than his predecessor William Hague, hit out at Warsi last night after being implicitly criticised in her resignation letter.

"Sayeeda and I have talked a great deal about her concerns, including a long conversation over the weekend, but we’ve seen some progress over the last 24 hours," he said.

"Everybody has to answer for their own conscience for their own actions, but I find it rather surprising that she's chosen now, this particular moment, to take this stand, when in fact we are now at long last seeing some relief."

Yesterday's ceasefire was holding for a second day this morning with many hoping it could signal the end of the violence. The four week conflict has so far resulted in 1,800 Palestinian deaths and 67 Israeli ones, 64 of which were soldiers.