British Foreign Secretary Ed Miliband pledges major changes to relationship with Israel, with new sanctions expected in the coming weeks.By World Israel News StaffBritish Foreign Secretary Ed Miliband has pledged a “comprehensive reset” of the United Kingdom’s policy toward Israel, saying London is considering new economic restrictions designed to prevent British companies from doing business with Israeli communities in Judea and Samaria.Speaking in the House of Commons on Tuesday in his first parliamentary appearance as foreign secretary, Miliband said the government was reviewing its broader economic relationship with the territories and would soon announce a new package of measures.“We need a comprehensive reset of our policy,” Miliband said, adding that Britain does not want its companies “financing, constructing or advertising new settlements.”The comments represent another potential deterioration in already strained relations between London and Jerusalem, with Israeli Foreign Minister Gideon Sa’ar warning that Israel would retaliate if Britain follows through with new sanctions.“If Britain acts against Israel, Israel will act against Britain,” Sa’ar said in an interview with Ynet, adding that Jerusalem has “tools” available to respond.Miliband’s immediate focus is Israel’s E1 construction plan, an area between Jerusalem and Ma’ale Adumim where Israeli authorities recently published tenders for 1,234 homes. A broader plan approved for the area encompasses roughly 3,400 housing units.The British government argues that construction in E1 would jeopardize territorial continuity for a future Palestinian state. Israel and supporters of the project argue that the area is strategically important for linking Jerusalem with Ma’ale Adumim.Miliband told lawmakers that E1 amounted to the “crossing of a red line” and warned that the project “risks making a Palestinian state unviable.”“This government will not acquiesce in the destruction of the two-state solution,” he said. Britain would announce “a comprehensive set of measures” within weeks.The foreign secretary had already signaled a tougher response last month. After Israel opened the E1 tender process, Britain summoned Israel’s chargé d’affaires and demanded that the project be withdrawn.“Britain will not stand back and accept the destruction of the Two-State Solution,” Miliband said at the time.Prime Minister Andy Burnham has previously said his government was examining measures to prohibit trade in goods produced in Israeli settlements, while Foreign Office Minister Stephen Doughty indicated Tuesday that a settlement trade ban remains among the options being considered.Britain currently advises companies against conducting economic or financial activity in Israeli settlements but does not prohibit such trade.In June, the government strengthened that guidance and warned British businesses against involvement in settlement construction. Nearly 140 members of Parliament have pressed the government to go further and enact a formal trade ban.Sa’ar accused the British government of pursuing Israel for domestic political reasons and warned that the proposed measures would backfire.“There is a government there that is systematically acting against Israel,” he said, pointing to previous British restrictions on defense exports and sanctions against Israeli ministers.Asked what retaliation Israel was considering, Sa’ar declined to provide details but said Jerusalem was preparing a response. Israeli officials have reportedly considered steps including removing British personnel from international bodies involved in coordinating postwar arrangements in Gaza.The dispute comes after several years of steadily worsening relations.Britain suspended roughly 30 arms export licenses to Israel in September 2024 after concluding there was a risk that certain equipment could be used in serious violations of international humanitarian law in Gaza.In June 2025, Britain joined Australia, Canada, New Zealand and Norway in imposing personal sanctions on Israeli National Security Minister Itamar Ben-Gvir and Finance Minister Bezalel Smotrich over what the governments described as incitement of violence against Palestinians.Three months later, in September 2025, Britain formally recognized a Palestinian state, saying the move was intended to preserve the possibility of a two-state solution.The two countries nevertheless retain significant economic ties. Total trade in goods and services between Britain and Israel amounted to approximately £6 billion in 2025, including £3.5 billion in British exports to Israel and £2.5 billion in imports.Miliband’s latest move has also alarmed British Jewish leaders, who argue that broad sanctions could extend far beyond the settlements and worsen hostility toward Jews in Britain.Keith Black, chairman of the Jewish Leadership Council, warned that new restrictions could have a “harmful impact on the UK Jewish community” and could interfere with Jewish connections to religious and historic sites, including the Western Wall.The potential British restrictions could also create friction with Washington.The Trump administration is reportedly closely following the proposed settlement sanctions, amid concerns that a British trade ban could affect American companies and collide with US laws intended to discourage participation in foreign boycotts of American allies.Miliband nevertheless indicated Tuesday that the government intends to move ahead.The foreign secretary said Britain would examine not only sanctions against individuals involved in settlement expansion but also the role of British businesses, as the Burnham government seeks to place economic pressure behind its opposition to Israeli construction in Judea and Samaria.The post UK vows ‘comprehensive reset’ of Israel ties, including punishment for E1 project appeared first on World Israel News.