JERUSALEM – The European Union set new guidelines Wednesday requiring Jewish settlements label export products as coming from territories occupied by Israel since 1967. Israeli leaders condemned the move as discriminatory and warned relations could suffer with one of its biggest trading partners.

The measures, published by the European Commission, mean producers in settlements in East Jerusalem, the West Bank and Golan Heights must explicitly label their EU-bound products such as poultry, dates, wine, olive oil, cosmetics and other consumer goods. Israeli products are not affected.

The decision represents a setback for the government of Prime Minister Benjamin Netanyahu, whose diplomats have alternatively been cajoling and threatening the 28-nation European Union not to move ahead on the new guidelines.

While economic impact of the new labels will likely be minimal – products from the Jewish settlements represent less than 2 percent of Israeli exports – the move was a potent symbol of Europe’s growing frustration with the collapse of peace talks with the Palestinians against the backdrop of Israel’s 48-year military occupation of the West Bank.

“We regret that the EU took this politically motivated and unusual and discriminatory step, that it learned from the world of boycotts,” the Israeli Foreign Ministry said.

The European Commission said it would no longer be acceptable, for example, to label a bottle of olive oil “Made in Israel” if it comes from a Jewish settlement in the occupied territories.

The suggested new labels would read “product from the Golan Heights (Israeli settlement)” and “product from West Bank (Israeli settlement).”

Products produced by Palestinians in the West Bank could be labeled “product from the West Bank (Palestinian product)” or “product from Palestine.”

European Commission officials said the labeling is not a boycott and that “Made in Israel” products would continue to imported into the bloc with low tariffs.

But the EU authorities said it was their duty to inform and not mislead consumers about the geographic origin of products so that the buyers can make informed decisions.

The fallout of the new rules is still unclear. Some consumers may choose to support Israel by purchasing settlement products; others may wish to send a message that they oppose Israel’s behavior.

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