THE EU executive approved new guidelines yesterday for labelling products made in Israeli settlements, a move Brussels said was technical but Israel called it “discriminatory” and damaging to peace efforts with the Palestinians.

Drawn up over three years by the European Commission, the guidelines mean Israeli producers must explicitly label farm goods and cosmetics that come from settlements built on occupied land if they are sold in the European Union.

Israeli officials were briefed ahead of the decision and responded quickly after it was taken. The foreign ministry issued a statement condemning the move, which it sees as an effort to put pressure on Israel over its settlements policy, and summoned the EU ambassador to Israel.

“We regret that the EU has chosen, for political reasons, to take such an exceptional and discriminatory step, inspired by the boycott movement,” the ministry said.

“It is puzzling and even irritating that the EU chooses to apply a double standard concerning Israel, while ignoring that there are over 200 other territorial disputes worldwide.”

The EU’s position is that the lands Israel has occupied since the 1967 Middle East war, including the West Bank, East Jerusalem and the Golan Heights, are not part of the internationally recognised borders of Israel.

As such, goods from there cannot be labelled “Made in Israel” and should be labelled as coming from settlements, which the EU considers illegal under international law.

“It’s an indication of origin, not a warning label,” the EU ambassador to Israel, Lars Faaborg-Andersen, told Reuters.

Britain, Belgium and Denmark already affix labels to Israeli goods, differentiating between those from Israel proper and those, particularly fruits and vegetables, that come from the Jordan Valley in the occupied West Bank. Now all 28 EU member states would have to apply the same labelling.

While there is no EU official wording, goods must carry the word “settlement” on the tag when sold in European shops. If an Israeli farmer refuses, a retail outlet can attach the label themselves, as the European Commission has sufficient information about where goods come from.

Israel’s ambassador to the European Union, David Walzer, warned it could make peace efforts with the Palestinians even more difficult and said the EU might no longer be a welcome broker.

Two elements of the EU decision have particularly enraged Israeli officials. They see the measures as an effective boycott of Israel and say other cases of long-standing occupation, such as Morocco’s seizure of Western Sahara, are not treated in the same way.

The EU dismisses the suggestion of a boycott, pointing out that it is not telling consumers what not to buy, adding those who do not want to buy Israeli settlement goods probably already don’t, and those that support the settlements may now seek out settlement produce.

The question of a double-standard is harder for the EU, which has struggled with the question of Western Sahara in the past. When it comes to goods from northern Cyprus, seized by Turkey in 1974, the EU calls it “an internal issue”.

The details of the guidelines, set out in a five-page document of some 12 paragraphs, are expected to be published formally later today. A Commission source said they did not constitute new legislation.

Since 2004, Israeli settlement products have not benefited from EU trade preferences. For all countries, the EU requires labelling of the origin of fruit, vegetables and honey.

Industrial goods, including processed food, are not subject to mandatory labelling under EU law, but can be voluntary.

Israel’s Economy Ministry estimates the impact of Wednesday’s decision will be about $50 million (£33m) a year, affecting fresh produce such as grapes and dates, wine, honey and cosmetics made from Dead Sea minerals.