Israel has warned that it may retaliate if the UK imposes sanctions against Israeli plans to expand settlements in the West Bank, a territory claimed by both Israel and the Palestinians. UK Foreign Secretary Ed Miliband has said the government is preparing to "reset" its policy toward Israel in the coming weeks. This follows statements from a UK minister suggesting that goods from Israeli settlements in the West Bank could face sanctions. Gideon Saar, Israel's foreign minister, warned that if Britain takes action against Israel, Israel would respond in kind. He told a Hebrew-language news site: "If Britain acts against Israel, Israel will act against Britain. If they act, I think they will be making a big mistake." UK Prime Minister Andy Burnham expressed concerns that Israel's plans to expand settlements, particularly in the E1 area, could "end" the possibility of a two-state solution, in which Israel and Palestine would exist as separate, sovereign nations. Speaking in the House of Commons, Burnham warned that if Israeli Prime Minister Benjamin Netanyahu moves forward with E1 plans before October's general election, it could jeopardize the prospects for peace in the region. The UK has condemned the E1 settlement as illegal under international law, as it would divide the West Bank from East Jerusalem, complicating the creation of a contiguous Palestinian state. In response to questions from Labour MP Debbie Abrahams, Burnham emphasized the urgency of addressing Israel's settlement policies, saying that the fast-tracked planning process for E1 suggests decisions may be made before the Israeli election. He stated that these developments could "imperil or end" the two-state solution and urged the government to act swiftly. Earlier, Miliband said the UK is reviewing ways to prevent British companies from financing, constructing, or advertising new settlements in the West Bank. He called the E1 expansion a "crossing of a red line" that threatens the viability of a Palestinian state. Foreign Office minister Stephen Doughty suggested the UK's policy reset could include a ban on trade with illegal Israeli settlements in the West Bank. He reiterated the government's condemnation of settler violence and the E1 plans, stating that the UK has joined other nations in opposing such actions. Doughty emphasized that British companies should not support new settlements and that the government is considering further sanctions, including measures targeting those involved in violence in Gaza. The UK has made it clear that it will not accept policies that undermine the possibility of a two-state solution and is preparing to outline new measures in the coming weeks.