Breakthrough follows Péter Magyar's appointment as Hungary's new prime minister.
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The European Union is prepared to approve sanctions targeting Israeli settlers, according to EU High Representative Kaja Kallas.
The policy shift represents a significant development in EU-Israel relations and marks a breakthrough that had been blocked previously. The shift comes days after Péter Magyar replaced Viktor Orbán as Hungary's prime minister, removing a key obstacle to unanimous EU action.
Hungary, under Orbán's leadership, had consistently opposed EU measures critical of Israeli settlement policy. Magyar's appointment removes that veto and enables the EU to move forward with sanctions targeting settlers in occupied Palestinian territories.