The Dutch government has imposed a ban on products from Israeli settlements and Israel has threatened to withdraw diplomatic accreditation from those doing so based in the occupied West Bank.

Israeli Foreign Minister Gideon Sa’ar announced on Sunday that the Dutch diplomats will have until Sunday to hand over their Israeli-issued diplomatic credentials. Their diplomatic privileges and immunities as granted by Israel will cease after the deadline passed, he said.

The Netherlands had implemented a trade restriction on products made in Israeli settlements in the West Bank, East Jerusalem and the Golan Heights, prompting the decision. The Dutch government will start enforcing the measure with effect from 22 September.

The goods coming from the listed Israel settlements are not allowed to be imported, bought or sold in the Netherlands, according to the Dutch rules. Restrictions also cover goods that are in personal bags or goods that are ordered online and delivered to the country.

The move does not affect trade with Israel in the internationally recognised 1967 borders of Israel and is limited to certain types of goods, Dutch authorities clarified.

The diplomatic conflict occurs because of differences between Israel and some European governments regarding their policies towards Israeli settlements in territories captured by Israel in 1967 following the Arab-Israeli war.

The Netherlands may also continue to provide a voice for the interests of the Dutch in relation to people residing in Palestinian territory, but not in the territory held by Israel, Sa’ar said.

The ruling coming after the restrictions on settlement goods was implemented represents yet another step in an escalating political dispute between Israel and the Netherlands.