Tánaiste Simon Harris has told supporters of an Occupied Territories Bill that he has “no issue” with a provision in the bill banning trade in services with Israeli firms based in occupied Palestine.
He did, however, point to the need to overcome legal concerns.
Mr Harris is expected to seek Cabinet approval to draft the heads of the bill next Tuesday. It is understood the heads – a summary of each section of the legislation – are already at an advance stage and will be published within a few weeks.
They would then be sent to the Oireachtas Committee on Foreign Affairs for discussion before the end of June.
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At that stage, campaigners are expected to press for the inclusion of services in the bill, which would extend the scope of the legislation considerably.
They want services included in the bill specifically to target Airbnb and other online letting services, through which rental properties in the Occupied Palestinian Territories are offered to tourists.
An investigation by the Guardian earlier this year found more than 700 rooms and properties in the Occupied Palestinian Territories were being advertised on online platforms.
The Government’s legal advice is that services cannot be included in the bill due to EU law. Campaigners say they have expert legal advice to the contrary.
A letter sent to the Government this week, from more than 300 prominent lawyers and academics, stated: “We do not consider there to be any insurmountable legal obstacles, in either Irish, European or international law, preventing the adoption of legislation prohibiting the import of goods and services produced in the unlawful Israeli settlements in the West Bank.
“We consider this is the absolute minimum required from the State to comply with its international legal obligations and the holdings of the International Court of Justice.”
In a legal opinion commissioned by campaigners last year, Prof Takis Tridimas, an expert in EU law at Matrix Chambers in London, found that prohibitions on services could be permitted under EU law on grounds of public policy.
His opinion was later cited by Attorney General Rossa Fanning in updated legal advice which permitted the Government to perform a U-turn on the bill and permit it to go ahead.
However, the Government is worried about the political and diplomatic fallout, as well as potential economic impacts, that proceeding with the bill could cause.
The US government conveyed its opposition to the bill to the Irish Government earlier this year. Pro-Israeli groups in the US are known to have raised the issue with politicians there.
Israel views the bill as part of the “boycott, divestment, sanctions” movement which sought to isolate the country economically and politically long before the current conflict in Gaza. Its supporters see it in similar terms.
Some Government sources say they believe that if Ireland adopts the bill, it will send a signal to other countries that may prompt a wider adoption of tougher measures against Israel.
They note that Ireland was previously a lone voice in advocating for a review of the EU’s trade agreement with Israel, but that 17 countries this week signed a letter seeking such a review.
If Ireland proceeds with a ban on trade with the Occupied Palestinian Territories, it is believed that other countries might then see it is possible.
“We are sending a message to other countries,” said one senior Government source.
