British foreign minister Ed Miliband condemned as "regrettable and damaging" Israel's decision to order the closure of the UK's consulate in Jerusalem as retaliation for London-led Western sanctions over settler violence.

"We anticipated this might happen because we saw other countries, the Dutch, for example, who had announced sanctions, who had seen these reprisals from Israel. I think they're regrettable and damaging," Miliband told BBC Radio on Wednesday.

Israel ordered the closure on Tuesday after 12 countries including the UK and France announced they would sanction trade with Israeli settlements in the West Bank, following a surge in attacks against Palestinians in the occupied West Bank.

Israel said it would also expel British representatives at a centre monitoring the US-brokered ceasefire plan in Gaza, bar British training for Palestinian Authority forces and ban 12 Britons, mostly members of parliament, from visiting the country.

Miliband rejected suggestions that the sanctions would impact intelligence cooperation with Israel.