COPENHAGEN—Denmark will introduce new labeling guidelines in the next two weeks for Israeli products from Jewish settlements in the Palestinian West Bank.

The labeling, which is modeled on a similar U.K. initiative from 2009, will specifically identify imported goods from the Israeli settlements and be mandatory for fruit and vegetable produce, but voluntary for other products where the identification of country of origin isn´t demanded by law, the Danish Veterinary and Food Administration said.

"The illegal settlements undermine the pursuit of a two-state solution and are thereby a major stumbling block for peace in the Middle East," Danish Foreign Minister Villy Søvndal said. He said the Danish government aims to raise public awareness about produce from the Israeli settlements.

"We will then leave it up to the consumers to make an informed decision," Mr. Søvndal said, adding that Denmark, with its European Union partners, will also work to strengthen the bloc´s ban on duty- free imports from the settlements.

On May 15, the EU Foreign Affairs Council said it is deeply concerned about developments on the ground in the Palestinian areas, "which threaten to make a two-state solution impossible." The council underlined that the settlements remain illegal under international law, irrespective of recent decisions by the government of Israel.

"The EU expresses deep concern regarding settler extremism and incitement by settlers in the West Bank. The EU condems continuous settler violence and deliberate provocations against Palestinian civilians," the council said, calling on the Israeli government to "bring the perpetrators to justice and to comply with its obligations under international law".

Still, Denmark remains the only EU country to join the U.K. in its efforts to raise awareness of products imported from the Israeli settlements.

Palestinian Ambassador to Denmark Amro Alhourani welcomed the new Danish labeling as a reflection of a strong Danish engagement with regard to human rights and international law.

"It is crucial to create results on the ground," Mr. Alhourani said in a statement. "The settlements on the West Bank are illegal, that has been determined by the international society. Therefore, it is important that words also lead to actions."

The Israeli Embassy in Copenhagen was quick to dismiss the move as a counterproductive political gesture.

"This is a counter-step that won´t help solve the Israeli-Palestinian problem. It makes us feel that Denmark doesn´t want to help find a solution," said Dan Oryan, deputy head of mission at the Israeli Embassy to Denmark.

"It will rather give the Palestinian side the feeling that they don´t need to come to the negotiating table to reach a solution," said Mr. Oryan.

The chief impact of the new labeling guidelines is likely to be symbolic. The Israeli settlements produce mainly fruit and vegetables for export. The largest Danish supermarket chain, Dansk Supermarked, has already banned all produce from the settlements. Purchasing manager Peter Loeth said the company has specifically instructed its suppliers that it won´t accept settlement produce.

"The new guidelines won´t have any effect for us. We have already made the choice not to accept these products," Mr. Loeth said.

The British Retail Consortium, the U.K. trade association for retailers, said it doesn´t have any data on the impact of the labeling program. Write to Flemming Emil Hansen at Flemming.Hansen@dowjones.com (Copyright © Dow Jones & Company, Inc.) 05/28/12)