View from Halgrimskirjka, Reykjavik | Christine Zenino / CC BY 2.0 / Flickr Reykjavík backs down on boycott after Israeli fury Israel had denounced the move as “a volcano of hatred.”

Iceland's capital withdrew a motion to boycott city council purchases of Israeli-made products just a week after passing it, in the face of furious reactions from Jewish groups and Israel, where one official spoke of a "volcano of hatred" erupting in Reykjavík.

The motion against buying Israeli products for "as long as the occupation of Palestinian territories continues" was passed last week at the urging of retiring Social Democratic Alliance councilor Björk Vilhelmsdóttir. She cited the city's purchasing policy, under which it must "always take into account quality, environmental and human rights issues."

"By passing this motion, the city of Reykjavík shows that it supports Palestine's right to become an independent, sovereign state within the borders established before the 1967 Six-day war," the text read.

The motion caught the attention of the international media, prompting an Israeli foreign ministry spokesperson to say: "A volcano of hatred is erupting out of the City Council building in Reykjavík."

Spokesperson Emanuel Nachson said "without any reason or justification, other than pure hatred, we hear calls to boycott Israel."

The Simon Wiesenthal Center cautioned Jews against traveling to Iceland, and the European Jewish Congress released a statement saying it was seeking advice on whether to take legal action.

According to the World Jewish Congress, there are an estimated 100 Jews living in Iceland, a country of about 300,000 people.

Iceland's government distanced itself from the council initiative. The foreign ministry released a statement last week saying the motion was "neither in line with Icelandic law nor with international obligations on public procurement under the WTO, which Iceland is a member of and Reykjavik City and other municipalities are bound by."

"The City of Reykjavik's resolution is not in line with Iceland‘s foreign policy nor should it be seen to reflect on Iceland‘s relations with Israel," the ministry said.

By Saturday, Reykjavík Mayor Dagur B. Eggertsson was on the retreat.

“I have stated that it should have been made much clearer in the text [that only products from territories occupied by Israel should be boycotted], although that’s what we had in mind," Eggertsson told national broadcaster RÚV. "I will suggest to the City Council that the motion the way it reads now be withdrawn while we discuss the next steps and how to present it.”

The motion was withdrawn at a City Council meeting on Tuesday evening.

While Iceland is not a member of the European Union, the furor comes as the European Commission prepares to issue guidelines on how to label goods originating in Israeli settlements beyond the country's pre-1967 borders.

In 2012, the Belgian government recommended to retailers that affected products — many of them agricultural — should be labeled "Product from the West Bank (Israeli settlement)." The U.K. and Denmark have also issued similar guidelines.

"Some member states have already gone beyond what the system per se allows. That’s why [they] have asked for guidance from the Commission to ensure uniform application," an EU source said.

Country-of-origin labeling is mandatory for food products in the EU, and the source said "you can’t label a settlement product as 'made in Israel' because that’s not correct.”

Earlier this month the European Parliament passed a resolution "encouraging" EU High Representative Federica Mogherini to complete the labeling guidelines.

After the Parliament vote, Israeli Prime Minister Benjamin Netanyahu said labeling was “a distortion of justice and of logic and I think that it also hurts peace; it does not advance peace.”

He added: “The root of the conflict is not the territories, and the root of the conflict is not the settlements. We have historical memory of what happened when Europe labelled Jewish products.”

Alex Benjamin, director of Europe Israel Public Affairs — a pro-Israel lobby group — warned the labeling of settlement products was a slippery slope towards further sanctions.

"It is going to start with 'let’s label the products'; the next step will probably be, 'let’s ban these from the European market'," Benjamin said. "If you want to have a partner in peace, if the EU wants to influence the peace process, it strikes me as odd to antagonize one of your political partners."

The Jerusalem Post this week quoted an EU official as saying the guidelines would be finalized by mid-October, but the European Commission said Tuesday that the report was inaccurate.

"Work is ongoing and it is not possible at this stage to give an exact time frame as to when it will be presented," an EU foreign affairs spokesperson said.