Israel is considering expelling British officials from the US-led coordination center for postwar Gaza, the Financial Times reported Thursday, amid a growing spat over the expansion of Israel’s controversial E1 settlements plan.

A source familiar with the matter confirmed the report to The Times of Israel, adding that “other measures” against London are also under consideration.

The source, as well as a second Israeli official, denied, however, that Israel was considering expelling Italian or German officials from the hub, as the FT report had claimed.

The move is being weighed amid a spat between Israel and the United Kingdom over London’s reported plans to impose a complete ban on trade in goods from West Bank settlements along with other punitive measures in response to the expansion of Israel’s controversial E1 settlement plan, which would impede territorial contiguity between major Palestinian population centers.

The source familiar with the matter said that in a recent call between Foreign Minister Gideon Sa’ar and British Foreign Secretary Ed Miliband, “Sa’ar made very clear to the Foreign Secretary that Israel cannot allow punitive measures to be taken against it without responding.”