JERUSALEM – For decades, Israel has marketed an array of cosmetics and food products manufactured in the occupied West Bank as "Made in Israel," blurring their true origins in Jewish settlements opposed by virtually the entire international community.

Now that practice is being challenged with demands that products made in the settlements be labeled accordingly.

Recent criticism, coming most prominently from South Africa, is putting Israel in a bind over the muddle it has created in the West Bank: Despite 45 years of control and a massive and costly effort to settle it with Jews, Israel has never annexed the territory — and the Palestinians claim it for a future state.

The limbo yields some bewildering results, such as Jewish settlers casting ballots in home communities not in Israel proper despite there being no provision for absentee voting.

Asked to explain the "Made in Israel" label for products made outside Israeli territory, Foreign Ministry spokesman Yigal Palmor reached for an unorthodox defense, arguing that it is not intended as a geographical indication.

"My point is not the sovereignty over the West Bank, but who is the authority that has supervised the product," Palmor told The Associated Press. "Since the products of the settlements are made under Israeli regulations and standards, they are ´made in Israel.´"

He said there were other cases of contestable labeling, including by the Palestinians who label products from parts of the West Bank governed by the Palestinian Authority as "Made in Palestine." There is formally no state of Palestine, he noted.

The Palestinians have long called for a boycott of goods made in Israeli settlements and even have lit bonfires to destroy them.

"We are calling for boycotting the Israeli products simply because the Israelis shouldn´t benefit from occupying our land and our people," said boycott activist Murad Sudani, who heads the Palestinian Writers Union.

Several weeks ago, South Africa issued a notice saying it wants to require merchants "not to incorrectly label products that originate from the Occupied Palestinian Territory as products of Israel." It said consumers should not be "misled" that the products originated in Israel.

The notice did not specify what the label should say, saying "the burden for proving where the products originate will lie with traders." The proposal has not taken effect, pending a 60-day period for public objections that can be submitted by the end of June. South Africa is not a major market for Israel.

Nonetheless, the voice of the South African government could be a symbolic boost to the Palestinians, given the country´s history of overcoming apartheid and its leading role in the developing world. It would become the first country to require distinct labeling of settlement goods.

Others have begun to move in the same direction.

Danish authorities said this week they would soon introduce labeling guidelines for settlement products. Erik Jepsen, spokesman for the Danish Veterinary and Food Administration, said Thursday that the rules would be mandatory for fruit and vegetables and voluntary for other products.

Danish Foreign Minister Villy Soevndal said the government wants to raise awareness about the settlements, which the EU considers a major obstacle to Mideast peace.

The move follows a British decision in 2009 to allow retailers to distinguish whether West Bank goods are produced by Palestinians or Israeli settlers. It was not clear if there were cases in which this was done.

This week, Swiss supermarket chain Migros said it would tell its customers if products come from the settlements. The chain said it opposes calls to boycott Israeli products but wanted to offer customers greater transparency. Previously, it identified products as coming from Israel.

In perhaps the strongest international stance against the settlements, the European Union has excluded settlement goods from duty-free status given to other Israeli imports.

Yigal Dilmoni, a settler leader, said the criticism is unfair. "All the communities in Judea and Samaria are part of the state of Israel," he said, using the biblical terms for the West Bank. "So of course these products are made in Israel."

Settlement products account for less than 1 percent of Israel´s exports of some $50 billion a year, according to the Manufacturers´ Association of Israel.

Dead Sea cosmetics, high-end wines and dates are some of the products produced in the West Bank. Many of the businesses employ Palestinian laborers.

"We think that politics and economics shouldn´t be mixed up. There is good economic cooperation with the Palestinians," said Dan Catarivas, director of the Manufacturers´ Association´s Division of Foreign Trade and International Relations.

Palmor said Israel is being unfairly singled out, claiming goods from other conflict zones don´t face similar scrutiny. Morocco, for example, exports tomatoes from the disputed Western Sahara with a "Morocco" label.

The Palestinians seek all of the West Bank and neighboring east Jerusalem as parts of a future state. Israel captured the two areas in the 1967 Mideast war.

Although Israel has annexed east Jerusalem, the international community considers both territories to be occupied and opposes the presence of the 500,000 Jews living in the two areas.

Peace talks have been stalled for more than three years, with the Palestinians refusing to restart negotiations until Israel stops all construction in the settlements. Israel says peace talks should resume without any preconditions. (© 2012 The Associated Press 05/31/12)