BRUSSELS - The European Union on Wednesday backed the labelling of products from Israeli settlements, sparking fresh tensions with a furious Israel, which said the move could harm the peace process with the Palestinians.

Israeli Prime Minister Benjamin Netanyahu said the EU “should be ashamed” of the long-awaited decision to approve guidelines for member states to put labels on goods from Jewish settlements in the occupied territories. The EU however insisted that it was just clarifying existing rules on the place of origin for goods that will go on sale in the 28-nation bloc.

Agricultural and cosmetic goods, which under EU law must carry an indication of origin, should now include the words “Israeli settlement” on their labels, according to the guidelines.

Jewish settlements in the Palestinian territories of the West Bank and annexed east Jerusalem and in the Golan Heights - all occupied by Israel in the 1967 Six Day War - are deemed illegal under international law. Israel has mounted a long and vocal campaign against the labelling plan first proposed by the EU in 2012.

Brussels tried to play down the decision and avoid a new row with Israel, with whom relations are already strained after the EU repeatedly condemned settlement building and several European countries recognised a Palestinian state.

Dozens of Palestinians were injured during clashes with Israeli forces in the West Bank Wednesday, the anniversary of the death of their leader, Yasser Arafat, the Palestinian health ministry said.

At least four people were wounded by live ammunition in Al-Bireh, near Ramallah, the ministry said, adding that doctors were operating to try to save the life of one person shot in the heart.

Another six Palestinians were hit with live ammunition in clashes in the city of Tulkarem, north of Tel Aviv.

The labelling move was “a technical issue not a political stance” and based on European consumer laws about indications of origin, European Commission vice-president Valdis Dombrovskis insisted.

“The EU does not support in any form a boycott or sanctions against Israel,” the Latvian official added.

The new guidelines state that “since the Golan Heights and the West Bank (including East Jerusalem) are not part of the Israeli territory according to international law, the indication ‘product from Israel’ is considered to be incorrect and misleading.’”

“Expressions such as ‘product from the Golan Heights (Israeli settlement)’ or ‘product from the West Bank (Israeli settlement)’ could be used,” it added.

But Israel reacted angrily to the move, immediately summoning the EU’s ambassador to the foreign ministry to receive a protest.

Trade from settlements accounts for only a small portion of commerce between the EU and Israel, but carries important symbolic weight.

Netanyahu said as he wrapped up a visit to Washington that the decision was “hypocritical, based on a double-standard policy since it only concerns Israel and not the 200 other conflicts around the world.”

He added: “The European Union should be ashamed.”

In September, Netanyahu ikened the labelling plan to what he said were similar labels placed on Jewish products in the Nazi era.

Israel’s foreign ministry said meanwhile that the labelling “does not advance any political process between Israel and the Palestinians”.

The EU is part of the so-called Quartet, set up in 2002 to promote the peace process, along with the United Nations, the United States and Russia.

“We regret that the EU has chosen, for political reasons, to take such an exceptional and discriminatory step, inspired by the boycott movement, particularly at this time, when Israel is confronting a wave of terrorism targeting any and all of its citizens,” the Israeli foreign ministry said, referring to a wave of stabbling attacks by Palestinians on Israelis.

On Tuesday in anticipation of the move, Israeli Energy Minister Yuval Steinitz called the labelling measure “disguised anti-Semitism”.

The Palestinians welcomed the move. “EU labelling of settlement products is a step in the right direction but insufficient,” the Palestine Liberation Organisation’s (PLO) negotiations affairs department said on Twitter.

PLO secretary-general Saeb Erekat meanwhile said the labelling decision was a “significant move toward a total boycott of Israeli settlements.”