The EU labeling rule exacerbated tensions between Israel and Europe, and some Israeli politicians condemned it as an echo of the Holocaust-era branding of European Jews and their storefronts with yellow stars.

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JERUSALEM — The European Union’s (EU) decision Wednesday to start labeling Israeli products made in the West Bank, east Jerusalem and the Golan Heights delivered a resounding show of international disapproval over Israel’s expansion of Jewish settlements and raised the pressure on Prime Minister Benjamin Netanyahu to renew peace efforts with the Palestinians.

Israel condemned the measure as unfair and discriminatory, but appeared helpless to stop its growing isolation over the settlement issue and its treatment of Palestinians. Relations with the EU in particular have deteriorated due to disputes over the settlements.

“The EU decision is hypocritical and constitutes a double standard,” Netanyahu said, adding that Israel had been unfairly singled out.

The EU move exacerbated simmering tensions between Israel and Europe, and some Israeli politicians condemned it as an echo of the Holocaust-era branding of European Jews and their storefronts with yellow stars.

The EU is Israel’s top trading partner, though products from the occupied West Bank, Golan Heights and east Jerusalem that will now require special labels make up less than 2 percent of Israel’s $13 billion in annual exports to the bloc’s 28 countries.

But while the immediate economic impact is expected to be minimal, there is fear the logic behind the labeling could be extended to the broader economy by targeting businesses that have operations or affiliates in the contested areas, as many do.

For example, Israeli banks that provide mortgages to West Bank homeowners could become vulnerable to divestment from Europe, retail chains with outlets in settlements could be barred from the Continent and manufacturers that use parts made in factories there could face labeling or sanctions.

The EU’s decision to proceed on guidelines years in the making came after several member states, and its own Parliament, formally or symbolically recognized an independent Palestinian state.

Those resolutions reflect mounting frustration in Europe over the stalemated peace process and the growing political pressure on leaders in countries with large Muslim populations.

Israel captured the West Bank, east Jerusalem and Syria’s Golan Heights in the 1967 Mideast war and began settling the areas shortly afterward.

The Palestinians claim the West Bank and east Jerusalem as parts of a future state, a position that has global support.

The international community opposes settlement construction, saying continued growth undermines establishing an independent Palestine alongside Israel. Today, nearly 600,000 Israelis live in the two areas, almost 10 percent of the country’s Jewish population.

EU officials described their decision as technical, saying it merely clarified existing policy. A spokesman, speaking on condition of anonymity, said Wednesday’s move “in no way changes” the bloc’s stance on the peace process or Israel’s special treatment in European markets, where “Made in Israel” items carry little or no tariffs.

But “products coming from the settlements cannot benefit from those preferences,” the spokesman said.

Lars Faaborg-Andersen, the EU ambassador to Israel, said the bloc does not recognize lands captured in 1967, including Israeli-annexed east Jerusalem, as Israeli territory. “This is something that also happens to be the view of 99 percent of the international community,” he said.

The EU has taken other steps to protest settlement construction. A free-trade policy with Israel does not apply to settlement goods, and a landmark technology-sharing agreement does not allow EU funds to be spent beyond Israel’s pre-1967 lines.

Although such products will not be banned, Israel fears the labels will be a political stigma.

The labeling rules apply to fresh fruit and vegetables, wine, honey, olive oil, eggs, poultry, organic products and cosmetics coming from Israeli-owned businesses and farms outside the state’s original borders.

Rather than “product of Israel,” these goods must be labeled with the term “settlement,” or “its equivalent,” the rules say, as in “product of West Bank (Israeli settlement).” Goods from Palestinian-owned businesses can say “product of Palestine” or “product of West Bank (Palestinian product).”

The producer, exporter and importer are responsible for complying with the regulations, but it is up to member countries to ensure the rules are followed, officials said. The new standard is optional for packaged foods and industrial products.

Palestinian leaders welcomed the initiative but said it did not go far enough.

Settlement-based businesses “make products with stolen natural resources on the land of the Palestinian people,” Saeb Erekat, secretary-general of the Palestine Liberation Organization, said in a statement. “Those products should not only be labeled, but should be banned.”

Mahmoud Nawajaa, a Palestinian leader of the boycott, said labeling was “hardly a proportionate response to repeated Israeli war crimes.”

The boycott movement, which started a decade ago, calls for cultural, academic and economic boycotts of Israel and has gained steam in the past year. The movement has growing support on U.S. college campuses and has claimed credit for the withdrawal by various international companies from projects in east Jerusalem and the West Bank.

There are about 1,000 Israeli companies in more than a dozen industrial zones in West Bank settlements, and roughly 23,000 acres of Jewish-run farms.

Israeli opposition lawmaker Yair Lapid, who supports the two-state solution, called the EU move a disastrous step that would only strengthen extremists on both sides.

“They just pushed back the possibility of negotiations and separation.”