The Foreign Office has confirmed that Britain's initiative against Israeli exports originating in the West Bank is merely the opening shot in a wider campaign it is waging against the settlements.

A paper sent by the UK to its European Union counterparts, which was revealed last week, urged EU members to exercise more vigilance in monitoring Israeli products, to ensure they were not manufactured in the settlements. Israel opposes British demands for clearly labelling such goods.

Israeli diplomats this week expressed amazement at the British move, which originated in Downing Street and has been energetically pushed by the Foreign Office.

According to the Israeli Foreign Ministry, neither the embassy in London nor Israel's envoys in Brussels have received any complaints that Israeli companies are flouting the trade agreement between Israel and the EU.

A few complaints have been received by Israeli customs, but according to one diplomat, "every complaint has been swiftly acted upon and the exporter notified of the regulations".

Israel is concerned that the real motive behind the British move is its ambition to be seen to lead Europe's Mid-East policy by targeting the settlements as the main obstacle to peace.

A Foreign Office source agreed that the paper was an exercise to demonstrate the UK's opinion that the settlements are not acceptable.

The FO reiterated its view that "the settlements are illegal... Practical steps ... include ensuring that goods from the settlements do not enter the UK without paying the proper duties and ensuring that goods are properly labelled."