ROTTERDAM, THE NETHERLANDS // The European Union took a step towards closer trade ties with Israel despite tensions over the construction of settlements in the Palestinian territories.

European opponents of Israel's settler policy, including NGOs, several political blocs and activists, now pin their hopes on a growing movement towards a consumer boycott of goods from Israeli settlements.

The European parliament voted by a large margin on Tuesday to open up Europe to Israeli pharmaceutical products after years of delays caused by opposition to the settlement policy.

The final nod for the trade deal came on the heels of an EU condemnation of new Israeli construction plans in the occupied territories, announced last week.

"Settlements are illegal under international law and threaten to make a two-state solution impossible," the bloc's foreign policy chief, Catherine Ashton, stated in reaction to the new plans.

She was expected to reiterate the EU's disapproval of Israeli settlements during a visit to Jerusalem yesterday.

Israel and its supporters argue that easing access for the Israeli pharmaceuticals, which may be followed by similar steps for different goods, would be beneficial to patients in the EU and should not be linked to political disagreements.

"The politicisation of a technical agreement has already caused delays in the provision of life-saving drugs to European patients at lower prices," wrote British Conservative member of the European parliament Marina Yannakoudakis last week in the UK's Jewish Chronicle.

Some European countries, such as Denmark, have taken a different approach, specifically targeting goods from Israeli settlements.

Denmark is promoting an initiative to encourage the labelling of these products, empowering consumers so that they can identify these goods in shops and boycott them if they so wish.

Last June, Denmark became the second European country to issue an official set of voluntary guidelines for labelling goods from settlements, after the UK took a similar step in 2009.

"We have made it very clear that we are not anti-Israeli. But we have an issue with settlements, like all EU countries have.

"There is very clear language in EU statements about the issue of settlements and the undermining of the two-state solution," a Danish foreign policy official told The National this week.

The EU foreign ministers stated this May that "the EU expresses deep concern about developments on the ground which threaten to make a two-state solution impossible".

Despite such statements, neither the EU as a bloc nor individual member states are about to take far-reaching steps against the settlements.

Stuart Reigeluth of the Brussels-based Council for European-Palestinian Relations, a Palestinian advocacy group, called the notion of formal sanctions on Israel in the current political climate "nonsensical".

But he did detect a change in Europe's attitude towards the Israeli-Palestinian issue.

"Among the larger public it is really hard to tell but among members of the European Parliament there is growing awareness and on the national member state level there has been a very positive shift," he said.

The Danish official also said that his country was pursuing the labelling of products from settlements EU-wide in response to expressions of interest from other countries.

The Israeli Embassy to the EU did not react to several requests for a comment and neither did an Israeli trade lobby group, but supporters object to labels other than "made in Israel".

One organisation that has called for settlement products to be labelled as such is the Brussels-based Quaker Council on European Affairs, QCEA.

"I think in particular that the EU should be consistent in the role that it plays," said the QCEA's Gordon Matthews.

"We would want there to be a clear distinction between goods from Israel proper and those from settlements."

Labels may be perceived as a relatively low-key response to the Israeli-Palestinian issue but Mr Matthews said that it was having an impact in the UK.

The Danish official also said that his government had pondered their effectiveness.

"We based ourselves on the British example, and the general impression was that such a scheme had been well received and had quite some effect."

Mr Matthews mentioned Germany as possibly the next country to adopt the labelling guidelines but acknowledged that it was a sensitive issue because of memories of the holocaust.

"I know that my German friends in particular are very sensitive of anything that might reek of anti-Semitism," he said.