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The Obama administration will ignore a provision in a new law targeting Israel boycotters that includes entities that boycott businesses in the West Bank settlements.

“By conflating Israel and ‘Israeli-controlled territories,’ a provision of the Trade Promotion Authority legislation runs counter to longstanding U.S. policy towards the occupied territories, including with regard to settlement activity,” John Kirby, the State Department spokesman, said Tuesday in a statement.

The language Kirby referred to is in a trade bill that requires U.S. negotiators to raise objections to Israel boycotts in their dealings.

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The language, part of a broad Trade Promotion Authority passed by both chambers of Congress and signed this week by Obama, says that “discouraging” Israel boycotts would become one of the “principal negotiating objectives” of U.S. officials.

It also explicitly includes “persons doing business in Israel or in Israeli-controlled territories” as illegitimate targets for boycotts.

Liberal pro-Israel groups, including J Street and Americans for Peace Now, objected to that provision, saying that for the first time it would confer U.S. recognition of Israeli sovereignty in the West Bank.

The bill was otherwise backed by an array of pro-Israel groups, led by the American Israel Public Affairs Committee. The bill’s drafters include Sens. Ben Cardin (D-Md.) and Rob Portman (R-Ohio), and U.S. Reps. Peter Roskam (R-Ill.) and Juan Vargas (D-Calif.).

Kirby said the Obama administration would continue to firmly oppose any boycotts of Israel, but would not abide by the clause referring to “Israeli-controlled territories.”

“The U.S. government has never defended or supported Israeli settlements and activity associated with them and, by extension, does not pursue policies or activities that would legitimize them,” he said.

Abiding by the clause referring to the territories could compromise trade dealings with Europe, where most countries have banned boycotts of Israel within its 1967 lines but have regulations restricting trade with Israeli businesses in the West Bank.

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