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The UK considers Israeli settlements in the occupied West Bank to be illegal under international law and says their expansion threatens the prospects of a two-state solution.
The government already advises British businesses against economic and financial activity involving settlements, while settlement goods do not receive preferential treatment under the UK's trade agreement with Israel.
Supporters of a ban argue that trade should not financially support settlements the UK considers illegal.
Critics may argue that further trade restrictions could complicate UK-Israel relations and should be targeted carefully to distinguish settlements from Israel itself.
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