Israel's Foreign Minister Gideon Saar (L) and Britain's Foreign Secretary Ed Miliband. AFP
Miliband, speaking in parliament for the first time as foreign secretary since his appointment in mid-July, said the government would not accept actions that threaten the viability of a future Palestinian state.
"We need a comprehensive reset of our policy," Miliband told MPs. "This government will not acquiesce in the destruction of the two-state solution. We will act, and I will set out a comprehensive set of measures in the coming weeks."
He singled out Israel's E1 settlement development plan, which provides for more than 1,200 homes, saying its approval had crossed "a red line".
"It cuts through the heart of the West Bank and risks making a Palestinian state unviable," Miliband said.
He also said Britain was reviewing its wider economic relationship with the occupied Palestinian territories, adding: "We do not want British companies financing, constructing, or advertising new settlements."
Miliband's remarks come after weeks of escalating attacks by Israeli settlers against Palestinian villages in the West Bank and as Israeli Prime Minister Benjamin Netanyahu has vowed to continue expanding settlements despite mounting international pressure.
Some of the recent settler violence has drawn rare condemnation from Netanyahu and unusually strong criticism from the US ambassador, alongside more typical criticism from European capitals.
More than 500,000 Israelis live in settlements in the West Bank, alongside some three million Palestinians. Israel has occupied the territory since 1967.
All Israeli settlements in the occupied West Bank are considered illegal under international law and have been repeatedly condemned on those grounds by the United Nations Security Council, the International Court of Justice, the International Committee of the Red Cross and human rights organizations.
Violence by Israeli settlers against Palestinians has surged since the start of Israel's war in the Gaza Strip in October 2023.
Addressing the recent spike in attacks, Miliband said the world had "seen appalling settler terrorism and Palestinians driven from their homes."
Short link: