Israel summons Ireland's ambassador after the country's parliament passed legislation banning imports of goods produced in Israeli settlements.
In order to become law, the bill still must pass through several obstacles.
The bill could see Ireland become the first European Union country to ban settlement goods and services, but would not apply to goods or services from within Israel itself.
Israel reacted angrily to the proposal calling it "populist, unsafe and extremist", while a spokesperson for the PLO expressed "sincere appreciation" for the initiative.
Senators voted in favour of the Control of Economic Activity (Occupied Territories) Bill by 25 votes to 20, with applause rippling through the chamber after an impassioned debate.More news: Congress to Trump: Cancel Putin summit after new Mueller indictments
The Palestinian Ministry of Foreign Affairs praised the Irish Senate for the decision, "that many other countries have avoided to make for years", despite previous resolutions to label products from illegal Israeli settlements according to the 2015 European Union regulations.
The government in Dublin - known to be one of the most pro-Palestinian governments in Europe - opposed the bill, arguing that it is not legally entitled to curtail trade with Israeli companies based in the settlements. "But I believe... we've made the case clearly".
"Legislation, which promotes a boycott of any kind, should be rejected as it does nothing to achieve peace but rather empowers the Hamas terrorists as well as those Palestinians who refuse to come to the negotiating table", the Israeli Embassy in Ireland said. But when he addressed the Seanad yesterday ahead of the vote, Foreign Minister Simon Coveney was outnumbered.
The bill was introduced by Frances Black, a well-known singer and member of the Seanad, the upper house in Ireland's Parliament.
There are at least 126 settlements in the West Bank excluding East Jerusalem, according to a September 2016 report from the Israeli Central Bureau of Statistics. Spokespeople for Prime Minister Netanyahu, who is also the foreign minister, said at the time that the initiative would "give backing to those who seek to boycott Israel and completely contravenes the guiding principles of free trade and justice".More news: World’s ugliest dog dies weeks after winning title
In the U.S. Senate, a bill doing the opposite has been proposed.
Although its opponents have labelled it as "radical" and claimed that it harms free trade, the bill actually enforces compliance with both global and Irish law. The campaign received support from over 6,000 people, including celebrities such as Charlie McGettigan and Christy Moore.
The UK Government has formally objected to the erasure of Khan Al-Ahmar, supporting the position of the United Nations that settlements are illegal under worldwide law, but has been criticised by Labour for offering nothing in the way of concrete actions to back up this objection.
The bill does not name Israel but instead refers to an "occupying power" and "illegal settler".
She said she visited Palestine earlier this year and, highlighting an Israel settlement which led to a Palestinian village losing its water supply to provide water for a chicken farm.More news: British Diver Who Helped Rescue Trapped Boys in Thailand Returns to UK