The US State Department said on Wednesday it was "deeply concerned" by a new EU requirement for businesses to label products from Israeli settlements in Judea and Samaria.
The statement came in response to Tuesday's ruling by the EU Court of Justice that settlement products must provide an "indication of that provenance" to better inform consumers.
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The State Department said the ruling encourages the BDS movement, a Palestinian-led campaign that promotes boycotts, divestment and sanctions against Israel.
It said the US "unequivocally opposes" any efforts to "economically pressure, isolate, or otherwise delegitimize Israel."
The EU said it opposes the BDS movement while adding that settlement goods cannot say "Made in Israel."
Israel's Foreign Ministry rejected the ruling, saying it set a "double standard" that unfairly singles out Israel when there are dozens of territorial disputes worldwide.
"The European Court of Justice's ruling is unacceptable both morally and in principle," said Foreign Minister Israel Katz. "I intend to work with European foreign ministers to prevent the implementation of this gravely flawed policy."
Saeb Erekat, the Palestinian Authority's chief negotiator, welcomed the ruling and called on all EU countries to "implement what is a legal and political obligation."
