Around 48 Israeli MKs have signed a petition calling for a total boycott of 20 Israeli suppliers who agreed to help build the first modern Palestinian city, Rawabi, north of Ramallah.
Rawabi, going up 20 miles (30 kilometers) north of Jerusalem, is a key part of Palestinian Prime Minister Salam Fayyad's plans to lay the groundwork for a future Palestinian state, regardless of progress in peace talks.
Fayyad has publicly advocated a boycott of settlement goods in the West Bank, and earlier this year, his government passed a law imposing heavy penalties and jail time on Palestinians who work in settlements.
But they haven't been able to find alternative sources of employment for the estimated 21,000 Palestinians who work in settlements in construction, agriculture or industry, and the law isn't being enforced.
It is not the building process that has irked the Israeli MKs, rather it is the decision of these comapnies not to use any of the settlement-made commodities in the building process. The announcement made, Jewish settlers were angered and accused the suppliers of caving in to an international boycott of settlement goods and businesses.
Project developer Bashar Masri told The Associated Press that he tries to use Palestinian suppliers whenever possible. But when necessary, he turns to Israeli firms on condition that products and services from any territories Israel captured in the 1967 Mideast war - the West Bank, east Jerusalem and the Golan Heights - are not used.
"Settlements are diabolical. They steal Palestinian land and are an obstacle to an independent Palestinian state, and it's time for us to put an end to that harm," Masri said.
The Israeli companies' decision was communicated in a statement announcing that they would not use settlement-made products throughout the construction process. Israeli public radio announced in its Jewish service on Monday that a group named “Israel Land” took the initiative and were the first to sign the petition. The group included MKs from right-wing parties in addition to MKs from center right Kadima.
“These companies imposed a ban on settlement-made commodities and this necessitates an appropriate government response,” the petition highlighted. In fact the wording of the petition was so outrageous that it bluntly accused the Israeli companies of "ignoring their Zionist origins and national solidarity in return for a bunch of dollars.”
Contracts with the Rawabi project were first reported late last month by Israel's Army Radio. Settler leader Dani Dayan fumed that Israeli companies agreed to the Palestinian conditions. "It's a capitulation to the boycott," Dayan said.
A number of Israeli companies have actually moved their offices from settlements areas to inside Tel Aviv after pressure by the European Union mounted.