The EU has agreed sanctions on violent Israeli settlers, ending a years-long deadlock over the issue but still taking only a “baby step” according to one MEP.

Kaja Kallas, the EU’s foreign policy chief, said on Monday: “Violence and extremism carry consequences.”

But there was still no consensus among the 27 member states on more hard-hitting trade sanctions.

France’s foreign minister, Jean-Noël Barrot, said the EU was “sanctioning the main Israeli organisations guilty of supporting the extremist and violent colonisation of the West Bank, as well as their leaders”.

“These most serious and intolerable acts must cease without delay,” he wrote on social media.

The full list of names has not been published following Monday’s agreement in principle but is understood not to include two extremist Israeli ministers, Itamar Ben-Gvir and Bezalel Smotrich. The pair were put under UK sanctions last June for their “repeated incitements of violence against Palestinian communities”.

The deadlock was broken after Hungary’s new pro-EU government lifted its veto on the sanctions, which had been blocked by the previous prime minister, Viktor Orbán. The EU would also sanction leading Hamas figures, Kallas said.

Israel’s foreign minister, Gideon Sa’ar, said the EU had chosen in “an arbitrary and political manner, to impose sanctions on Israeli citizens and entities because of their political views and without any basis”.

The measures against a small number of settlers fall short of what some member states wanted. France and Sweden have called for tariffs on imported products from illegal settlements. “We believe that the EU urgently needs to increase the pressure on Israel to halt its settlement policy and practices,” the two countries wrote in a joint paper.

Sweden’s foreign minister, Maria Malmer Stenergard, said putting tariffs on products from illegal settlements was “the most realistic proposal”.

Banning products requires unanimity among the 27 member states, whereas tariffs can be imposed by a majority vote.

Under the EU-Israel association agreement, goods from the occupied territories miss out on preferential terms but trade is not prohibited.

Kallas, who is also a vice-president of the European Commission, said she could not issue a draft law to impose tariffs on goods from illegal settlements: “I raised this issue that member states wanted this proposal. I asked [for] this, but the proposal is not there. And I can’t draft it.”

Barry Andrews, an Irish centrist MEP, who chairs the European parliament’s development committee, said EU foreign ministers had taken a “welcome (baby) step”. Writing on X he called for enforcement of labelling and banning of settler products, as well as ending research cooperation with Israel. He added: “Ultimately, only a review of the EU-Israel association agreement, with view to suspension, will have a major impact.”

Amid surging violence in the West Bank and the dire humanitarian situation in Gaza, the EU is under renewed pressure to use its leverage to push Israel’s government to change course.

Former senior EU diplomats and officials called last week for sanctions against all individuals and entities engaged in illegal settlements, including planners, lawyers, banks and other professionals involved in the proposed E1 settlement.

The signatories say this illegal settlement of 3,400 illegal homes would cut the West Bank in two “and so wreck any prospects of a viable Palestinian state”. The declaration was signed by 452 former senior EU politicians, diplomats and officials, including two former prime ministers, Guy Verhofstadt of Belgium and Stefan Löfven of Sweden.

Since the 7 October attacks by Hamas, Israeli settlers have pursued a growing campaign of violent intimidation against Palestinians in the West Bank with the aim of driving them from their land. According to UN figures, 230 Palestinians were killed in the West Bank by Israeli forces and settlers last year.