The UK Government’s response to Israel’s expanded military operations in Gaza
The UK government has announced it was pausing free trade negotiations with Israel due to the “egregious” policies being pursued by the Israeli government in Gaza and the West Bank. The Foreign Secretary also introduced further sanctions on “individuals, illegal settler outposts and organisations supporting violence against Palestinian communities in the West Bank” and summoned the Israeli ambassador to London, Tzipi Hotovely. The announcement came hours after Britain, France and Canada released a strongly worded statement which condemned expanded Israeli military operations in the Gaza Strip and termed resumed aid deliveries in Gaza as “wholly inadequate”. Keir Starmer, Emmanuel Macron and Mark Carney also threatened “further concrete actions” unless Israel ceased its military operations and further eased restrictions on humanitarian aid to Gaza. On Sunday, the Israeli government announced humanitarian aid would begin to flow into Gaza following a recommendation by the IDF which had reportedly warned that food supplies in Gaza were running out. On Tuesday, 93 trucks of aid entered Gaza containing flour, medical equipment, baby food and medicine. Israel accuses Hamas of stealing aid and reselling it to Gazans at a profit in order to fund its military campaign against the Jewish state. In response to the statement from the UK, France and Canada, the Israeli prime minister, Benjamin Netanyahu, said on Monday evening: “The war can end tomorrow if the remaining hostages are released, Hamas lays down its arms, its murderous leaders are exiled and Gaza is demilitarised.”
The context
“An extraordinary act”
On 7 October 2023, Hamas broke an effective ceasefire in Gaza by invading and attacking southern Israel. Some 1,200 people – ranging in age from babies to Holocaust survivors – were murdered and 251 hostages seized. There is now strong evidence from Hamas documents recovered since the start of the war that Yahya Sinwar, the terror group’s former leader, planned what he termed an “extraordinary act” in order to prevent a normalisation deal between Israel and Saudi Arabia. Some 58 hostages remain in captivity, up to 23 of whom are believed to be alive.
The current Israeli military operation
Israel last week launched “Operation Gideon’s Chariots”. It follows the collapse of the 42-day ceasefire in March and Hamas’ repeated refusal to agree to an extension of the truce and the staged release of Israeli hostages seized in the 7 October attacks on Israel.
The IDF has announced three key goals for the operation:
“Achieving operational control in the areas where we operate, clearing those areas of enemy presence and striking terror infrastructure both above and below ground.”
“Distancing the civilian population for its safety from the areas in which we are operating, while weakening Hamas’ control.”
“Targeting Hamas’ command and control system, striking its commanders and remaining capabilities, until its military and governmental collapse.”
In its early days, Israeli forces have struck Hamas command centres, underground tunnels (including a 2km-long underground route used by the terror group), weapons depots, anti-tank missile positions, and booby-trapped buildings.
A strike on an underground Hamas command and control located beneath a hospital in Gaza is believed to have killed its military commander in the territory, Mohammed Sinwar, the brother of the author of the 7 October atrocities, Yahya Sinwar. Another senior Hamas military commander, Mohammed Shabana, is also reported to have been killed.
Hamas continues to mount rocket attacks on southern Israel, last week targeting the city of Ashkelon.
Israel’s dilemma
Negotiations between Israel and Hamas in Qatar for a further ceasefire-hostage deal appear to have stalled. A US plan, which Israel has accepted, has been turned down by Hamas. The terrorist group is unwilling to cede power in Gaza and has rejected Israeli offers for it to go into exile (a proposal which mirrors the manner in which the PLO leadership and fighters left Lebanon for Tunisia in the early 1980s). The leader of the Palestinian Authority, President Mahmoud Abbas, last week also urged Hamas to abandon power and hand its weapons to the PA. However, Hamas wishes – as it did after conflicts with Israel in 2008-9, 2012 and 2014 – to use a ceasefire to rebuild its Iranian-supplied arsenal and prepare its next attack on Israel. The group’s leaders have vowed to repeat the October 7 attacks “twice and three times” until Israel is annihilated and said “everything we do is justified”.
The view from Israel
Israeli opposition parties oppose the current government’s approach, a view seemingly shared by the Israeli public. Polling indicates two-thirds of voters support ending the war in return for the release of all the hostages. There also appears to be strong backing in Israel for a normalisation deal with Saudi Arabia – encompassing diplomatic, economic and security cooperation – which includes recognising a Palestinian state. Other polls have found similar levels of support. The Hostage and Missing Families Forum has said the Israeli government has “no real plan to bring back the last hostage," adding: “The majority of the public supports the return of all the hostages, even at the cost of halting the fighting. Only the return of all of them at once will allow for a process of rehabilitation and recovery for the country and the army. Hamas will not be defeated without bringing back the last hostage.”
The humanitarian situation in Gaza
During the ceasefire which began January, Israel facilitated 25,000 aid trucks into Gaza. Claiming that this created a surplus of food and goods, it halted aid following the collapse of the ceasefire in March. Israel says it monitors the amount of essential goods in Gaza on a daily basis. On Sunday, following a recommendation from the IDF that supplies were running dangerously low, it agreed to allow aid deliveries to resume. Israeli human rights groups had taken the government to the Supreme Court to force it to resume aid supplies.
In order to prevent Hamas’ theft of aid, Israel is developing a new mechanism to provide aid directly to the civilian population in Gaza using internationally vetted, non-governmental actors under military supervision. The new Gaza Humanitarian Foundation says it will be a “secure, transparent system to deliver aid directly and effectively — without diversion or delay and in strict adherence to the humanitarian principles of humanity, neutrality, impartiality, and independence”. GHF will be led by Jake Wood, cofounder of the US disaster relief body Team Rubicon, which has worked in over 30 countries, including Ukraine, following its establishment to aid victims of the 2010 Haiti earthquake.
Four initial new aid distribution centres are expected to be operating by the end of the month; aid is currently being supplied using existing mechanisms.
In widely reported remarks on Tuesday, Tom Fletcher, the UN’s under-secretary-general for humanitarian affairs, told the BBC: “There are 14,000 babies that will die in the next 48 hours unless we can reach them. I want to save as many as these 14,000 babies as we can in the next 48 hours.” The BBC has now clarified that the claims were false and based on an incorrect interpretation of a report issued by the UN’s Integrated Food Security Phase Classification. The IPC had, in fact, said that 14,100 severe cases of acute malnutrition were expected to occur between April 2025 and March 2026 among children aged between six months and five years.
Fletcher described Israel’s decision to resume aid as “a welcome development” but said “significantly more aid must be allowed into Gaza”.
The new measures
Trade talks suspended and settler leaders sanctioned
A joint statement between Britain, France and Canada issued on Monday evening warned the “level of human suffering in Gaza is intolerable”, said the resumption of humanitarian aid was “wholly inadequate”, and called for an end to the expanded Israeli military operation in Gaza. It also called for Hamas to release the hostages it had “cruelly” held since 7 October. “Israel suffered a heinous attack on October 7. We have always supported Israel’s right to defend Israelis against terrorism. But this escalation is wholly disproportionate,” the statement suggested, before warning of “further concrete actions”. The leaders said: “It is a ceasefire, the release of all remaining hostages and a long-term political solution that offer the best hope of ending the agony of the hostages and their families, alleviating the suffering of civilians in Gaza, ending Hamas’ control of Gaza and achieving a pathway to a two-state solution.”
Hamas praised the joint statement, saying: “The declaration reflects a principled stance against the Israeli occupation’s policy of siege and starvation targeting Palestinians in the Gaza Strip, as well as Zionist plans of genocide and forced displacement.”
On Tuesday, the David Lammy, the foreign secretary, announced a “formal pause” to free trade negotiations with Israel. “While the UK government remains committed to the existing trade agreement in force, it is not possible to advance discussions on a new, upgraded FTA with a Netanyahu government that is pursuing egregious policies in the West Bank and Gaza,” the Foreign Commonwealth and Development office said before a statement to parliament in which the foreign secretary termed Israel’s military offensive “intolerable”. Referring to comments by Israel’s finance minister, Bezalel Smotrich, in which he advocated “conquering, cleansing, and remaining in Gaza until Hamas is destroyed”, David Lammy said: “It is extremism. It is dangerous. It is repellent. It is monstrous.”
In an olive branch to the Israeli public Lammy also said: “I say now to the people of Israel: we want, I want, a strong friendship with you based on our shared values, with flourishing ties between our people and societies. We are unwavering in our commitment to your security and to your future, to countering the very real threat from Iran, the scourge of terrorism and the evils of antisemitism.”
Britain also announced a new package of sanctions against three individuals, two illegal settler outposts and two organisations which it accuses of “supporting violence against Palestinian communities in the West Bank”. The most prominent individual to be targeted is the radical settler leader Daniella Weiss, who is now subject to an asset freeze and travel ban.
The Middle East minister, Hamish Falconer, said his meeting with Israel’s ambassador, Tzipi Hotovely, would set out “the government’s opposition to the wholly disproportionate escalation of military activity in Gaza and emphasise that the 11-week block on aid to Gaza has been cruel and indefensible. I will urge Israel to halt settlement expansion and settler violence in the West Bank.”
The Conservative opposition condemned the UK move, with Greg Smith, the shadow business minister, saying: “It is an absurdity that the UK Government have taken a new stance which has won the support of Hamas - an organisation we proscribe as a terrorist organisation - and is the aggressor in the war with Israel. We all want aid to reach the innocent in Gaza and for an end to bloodshed - but handing over a massive gift to the terrorists is no way to go about it.”
Israel’s response
Israel’s Ministry of Foreign Affairs highlighted the lack of progress in free trade talks since the new government came to power, and referenced a terrorist attack in the West Bank last week in which a pregnant woman who was about to give birth was murdered:
“Even prior to today’s announcement, the free trade agreement negotiations were not being advanced at all by the current UK government. More than that, the agreement would serve the mutual benefit of both countries. If, due to anti-Israel obsession and domestic political considerations, the British government is willing to harm the British economy — that is its own prerogative.
The sanctions against residents of Judea and Samaria are unjustified, and regrettable, especially at a time when Israel is mourning yet another victim of Palestinian terror — Tzeela Gez, of blessed memory, who was murdered on her way to the delivery room. Doctors continue fighting for her newborn’s life in hospital.
The British Mandate ended exactly 77 years ago. External pressure will not divert Israel from its path in defending its existence and security against enemies who seek its destruction.”
The decision to suspend trade negotiations
The UK decision to pause the formal free trade negotiations is unlikely to have a significant impact on Israeli decision-making nor secure the government’s stated aim of bringing the conflict in Gaza to an end. Like the decision to suspend some arms sales last September, it appears to be more of a gesture – although one stands in stark contrast to the government’s approach to pursuing closer trade ties with other states – including those, such as China, which, unlike Israel, are not long-time allies – and thus risks the perception it is engaging in double-standards. And it will further damage the UK-Israel relationship which brings important economic, strategic and security benefits to the people of Britain and Israel alike.
What’s the history?
Negotiations for a Free Trade Agreement between the UK and Israel were launched in July 2022. Five rounds of talks have been conducted (the last in April 2024) and the business secretary, Jonathan Reynolds, confirmed in July the new government’s intention to continue pursuing a deal.
The dispute between the two countries over the UK suspension of some arms sales licenses appears not to have cooled the enthusiasm of either country for an agreement, with a UK government spokesman saying the arms decision was “separate to our commitment to deliver our trade negotiations with Israel”.
In December 2024, Reynolds reaffirmed that an FTA with Israel was “one of our priorities” to which he said he was “personally committed”. He also appeared to suggest that the government intended to separate its disputes with the Israeli government over the conflict in Gaza from its economic relationship with Israel. “Even where we’ve had to make difficult decisions, like on the arms exports licensing, I’ve always done that in a way in which at talks with my counterpart explains [sic] that is one issue but there’s a whole range of really important bilateral economic relationships which we think are really important,” he told the Jewish News in an interview.
Will it work?
The impact of suspending the trade talks with Israel is uncertain. As the Israeli MFA pointed out, the negotiations have effectively been on ice, a point tacitly made by the business secretary last December when he said: “Security issues have obviously meant that has become a priority for Israel. We understand that.” In a statement condemning the move, Labour Friends of Israel said: “Weakening Britain’s important economic, security and strategic relationship with Israel will do nothing to bring about an end to the tragic conflict Hamas initiated on 7 October 2023.”
How will it impact Britain?
Israel is a regional economic powerhouse which has a close trading relationship with the EU and the UK. Nonetheless, there is considerable scope to broaden and deepen this partnership to the mutual benefit of all. In terms of GDP, Israel was the world’s 28th largest economy in 2024.
Total trade in goods and services (exports plus imports) between the UK and Israel was £5.8 bn in the four quarters to the end of Q4 2024. Israel investment in the UK stood at £1.1bn in 2023, a rise of 10.3 percent on 2022, while exports to Israel supported around 38,100 jobs in the UK in 2020. In 2024, around 6,200 UK VAT-registered businesses exported goods to Israel.
Opportunities missed?
There are a number of areas in which increased trade and cooperation with Israel could help boost the UK government’s key priorities.
Growth: The services sector makes up around 80 percent of both the UK and Israel’s economies but only accounts for just over one-third of total UK-Israel trade.
Tech and innovation: The 2024 Global Innovation index ranks Israel as the most innovative economy in Northern Africa and western Asia and 15th globally (immediately behind China, France, Japan and Canada and above Austria, Hong Kong and Australia). In 2021, the UK led the list of European (EU) states in terms of the presence of Israeli tech companies, with 405 companies (out of 912) and 6,363 employees (out of a total of 24,223).
AI: A recent report found Israel to be a global leader in AI innovation – especially in the fields of healthcare, climate tech, robotics, cybersecurity and agrifood – with Israel’s AI startup activity two to four times greater than that observed in the United States or Europe. The 2024 Stanford AI Index, ranks Israel first globally in terms of AI talent concentration and fifth in relative AI skill penetration rate between 2015 and 2023, surpassing the global average across similar occupations.
Healthcare efficiencies: Medicinal and pharmaceutical products are Israel’s leading export into the UK. Teva Pharmaceuticals is the biggest supplier of NHS medicines with one in five prescriptions estimated to be provided by the Israeli company. Based on the NHS’s total drugs bill and the amount of generics it provides, Teva estimates that it contributes more than £2.9 bn of savings per year to the health service.
Healthcare innovation: In opposition, health secretary Wes Streeting visited Israel and praised its use of tech in healthcare, saying it was “10 years ahead of the NHS”. In 2023, it was announced that six Israeli tech companies will partner with NHS heath trusts in the north of England to run their first UK clinical trials and R&D projects. The project – which will run in hospitals in Manchester, Leeds, Liverpool and Hull – is the first of its kind and covers innovation in physiotherapy, diabetes, spine surgery, as well as tools to help hospitals run better, reduce staff workload and save money.
Climate tech and green innovation: Israel’s climate tech sector, which grew by 60 percent between 2016 and 2022, has led to the country being described as a “laboratory for research and development in renewable energy; water purification, desalination and management; and sustainable agriculture”.
Is it fair?
Since taking office, the Labour government has sought to expand Britain’s trading relationships as part of its goal of boosting growth. As well as recent deals with traditional allies, such as the US, the EU and India, senior ministers (including the prime minister) have visited China, Saudi Arabia and the UAE in order to strengthen economic ties. Ahead of her visit to China in January, for instance, the chancellor wrote that the UK “must engage confidently with China in areas of trade that benefit the UK’s national interest”, while being read to speak “often and candidly with China where we disagree”.
But, as the Jewish Leadership Council said in response to the decision yesterday, the UK appears to be operating a double-standard when it comes to Israel:
“The government has made free trade a priority objective since coming to power. Agreements are made in recognition of mutual benefit. Until this point, free trade negotiations have been sought with a variety of countries including those with competing interests and values. Today's statement appears to abandon this principle for one country alone, a country fighting a war against terror as our country has fought terror.”
Richard Pater, director of the Britain Israel Communications and Research Centre, wrote of the announcement: “The British government’s pronouncements sound out of touch to Israeli ears. Far away from the comfort of Westminster, the harsh reality is keenly felt across Israel, particularly at a time when life is still regularly interrupted by Houthi missiles. Halting negotiations on a free trade deal appears vindictive and self defeating.” He also pointedly asked what action the British government would be taking if 300 Britons – the equivalent to the 58 Israeli hostages – had been held in captivity for nearly 600 days.
The future
What next?
Palestinian state recognition:
The joint UK-France-Canada statement hinted at a move towards recognising a Palestinian state. Referring to a June UN conference on a two-state solution which is being hosted by France and Saudi Arabia, the joint statement said: “We are committed to recognising a Palestinian state as a contribution to achieving a two-state solution and are prepared to work with others to this end.” Labour’s 2024 election manifesto had indicated recognition would only come as part of a peace process, saying: “We are committed to recognising a Palestinian state as a contribution to a renewed peace process which results in a two-state solution with a safe and secure Israel alongside a viable and sovereign Palestinian state.”
Sanctions targeting the Israeli government:
Reports indicate the government is considering imposing sanctions on two far-right ministers of the coalition, Bezalel Smotrich, the finance minister, and Itamar Ben-Gvir, the national security minister.