The European Commission has formally introduced a comprehensive package of proposals aimed at imposing sanctions on Israel. These measures are a direct response to Israel's ongoing military actions in Gaza and the deepening occupation of the West Bank, which Brussels asserts are in breach of the EU-Israel Association Agreement. The Commission's decision is rooted in the "rapidly deteriorating humanitarian situation in Gaza following the military intervention of Israel, the blockade of humanitarian aid, the intensifying of military operations," including the current ground offensive, as well as the "decision of the Israeli authorities to advance the settlement plan."

The proposed sanctions extend to ten members of the Hamas terrorist organization and two "extremist" ministers within the Israeli government: Security Minister Itamar Ben Gvir and Finance Minister Bezalel Smotrich. They are targeted for their alleged roles in inciting violence in the West Bank. Furthermore, the package includes the suspension of preferential trade concessions under the EU-Israel Association Agreement, meaning duties will now be applied to certain goods previously exempted. This suspension would also entail putting bilateral support to Israel on hold, though without impacting the EU's work with Israeli civil society or the Yad Vashem Holocaust memorial. Additionally, violent settlers and several settler organizations in the West Bank will face sanctions.

European Commission President Ursula von der Leyen had previously hinted at the plan to use EU-wide measures to pressure Israel. She underscored the urgency of the situation, stating, "The horrific events taking place in Gaza on a daily basis must stop. There needs to be an immediate ceasefire, unrestrained access for all humanitarian aid, and the release of all hostages held by Hamas." EU Foreign Policy chief Kaja Kallas clarified the intent behind the proposals, explaining that the aim is "not to punish Israel" but rather "to pressure the Israeli government to change course" and alleviate suffering in Gaza. EU Trade Commissioner Maros Sefcovic echoed this sentiment, calling the measures "necessary" and "proportionate" given the humanitarian crisis.

The economic ramifications of these proposals could be significant. The EU serves as Israel's largest trading partner, accounting for 32% of its total global trade in goods in 2024. In 2024, trade in goods between the EU and Israel amounted to €42.6 billion, with EU imports from Israel valued at €15.9 billion. It is estimated that if the preferential trade agreement is suspended, Israel would incur an additional €227 million annually in duties. While regretting the necessity of these steps, EU officials maintain the process adheres strictly to the EU's legal rules and regulations concerning trade and internal decision-making.

The Israeli government has vehemently rejected the proposals, vowing no changes to its policies regarding Gaza or the West Bank. Israeli Foreign Minister Gideon Saar accused von der Leyen of "empowering" Hamas and criticized the action under the EU-Israel Association Agreement as being "replete with false accusations and legal flaws." For the proposals to pass, EU member states must vote to approve them, requiring a qualified majority. Historically, similar policies aimed at sanctioning Israel for its actions in Gaza and the West Bank have been routinely rejected by several member states, including Italy, Germany, Austria, Czech Republic, Hungary, and Bulgaria. The support of either Italy or Germany, two of the largest countries, is critical for passage; however, both governments have consistently opposed such actions. Despite this, EU Foreign policy chief Kaja Kallas noted that "public opinion is shifting in member states and people want to see the suffering stop."