The European Commission has introduced new labelling guidelines for products produced in illegal Israeli settlements in the occupied Palestinian territories.
The measures, published on Wednesday, require that producers must explicitly label products that come from settlements built on land occupied by Israel if they are sold in the European Union (EU).
The interpretive notice of the new measures said: "The European Union, in line with international law, does not recognise Israel's sovereignty over the territories occupied by Israel since June 1967, namely the Golan Heights, the Gaza Strip and the West Bank, including East Jerusalem, and does not consider them to be part of Israel's territory, irrespective of their legal status under domestic Israeli law.
"The Union has made it clear that it will not recognise any changes to pre-1967 borders, other than those agreed by the parties to the Middle East Peace Process."
The interpretive notice also makes it clear that it is not a new law, rather it reflects the commission's understanding of relevant EU legislation.
The notice identifies a distinction between products that should be labelled, namely mandatory and voluntary.
Mandatory indication of origin or labelling includes products such as fresh fruits, vegetables, wine, honey, olive oil, eggs, poultry and organic products as well as cosmetics.
Magazine: Meet Israel's boycotters
Voluntary products applies, among other things, to pre-packaged foodstuffs and industrial products excluding cosmetics.
Responsibility of individual states
The notice makes it clear that labelling must be correct and not misleading. It adds that enforcement of this notice is the responsibility of individual states.
The move drew an angry response from the Israeli government, with the foreign ministry issuing a statement denouncing the EU measure.
The Israeli government had strongly lobbied European countries and leaders, arguing against the labelling of Israeli products.
In the statement, the Israeli foreign ministry called the EU's decision "exceptional" and "discriminatory".
Writing on his Facebook page, the Israeli Energy Minister Yuval Steinitz described the measure as "disguised anti-Semitism".
Israel has occupied the Palestinian territories of the West Bank, Gaza and East Jerusalem since the 1967 war.
Under international law, Israel is prohibited form building settlements in the occupied territories.
Saeb Erekat, the PLO secretary-general, welcomed the European Commission's move.
"[We] consider it a significant move towards a total boycott of Israeli settlements, which are built illegally on occupied Palestinian lands," he said in a press statement.
Speaking to Al Jazeera, Mustafa Bargouthi, a senior member of the Palestine Liberation Organization (PLO), described the EU measure as an "important initial step that would open the door to boycott Israeli products made in the occupied territories".
"The EU decision sends the message that the Israeli occupation is illegitimate and all the byproducts of that occupation, including business and commerce, should also be delegitimised," he said.
'Settlements are illegitimate'
US state department spokesman Mark Toner said on Tuesday that Israel should not be surprised by the EU decision to label products produced in the settlements.
He also stressed the US position that it "opposes any efforts to delegitimise the state of Israel".
At the same time, Toner affirmed that the US policy on the issue of Israeli settlements has not changed.
"We believe settlements are illegitimate and are harmful to prospects for peace and to Israel's long-term security," he said.
An estimated 550,000 illegal Israeli settlers currently live in over 200 settlements built in the occupied Palestinian territories since 1967.
The EU is Israel's largest trading partner, amounting to approximately $32bn in 2014.
Israel and the EU are parties to the EU-Israel Association Agreement, which took effect in 2000 and regulates the trade between them.
Israel is also part of the Euro-Mediterranean partnership (Euromed) agreement which include 16 European and Arab countries in the region.
The Euromed intends to foster economic integration between the countries in the Mediterranean region.
Follow Ali Younes on Twitter: @Ali_reports