For 20 years we have managed to create peaceful coexistence. This decision to boycott will end it, he says, his angry tone raising eyebrows among patrons in Avi's Restaurant, one of his businesses in the industrial park on the dusty edge of the Judaean desert.

Even so, he is not worried about the immediate financial impact of the boycott.

Officially no one here is selling to the Palestinian territories, he says, adding that about five percent of the 300,000 dollars a month his sweets factory rakes in comes from Palestinians.

We use our Jewish ingenuity, for example by labelling the goods as coming from Tel Aviv.

The practice of fake labels of origin is widespread, according to a senior executive at a Mishor Adumim factory, who asked not to be identified.

In some cases it is also used for exports to countries like Saudi Arabia, which not only object to settlements but profess little love for Israel itself, she says.

She too is unfazed by the boycott of products, but admits she is seriously worried about the possibility the PA could enact a law banning Palestinians from working in settlements as of January 1.

That could force us to close down, she says. Other plants would find themselves in the same situation and thousands of Palestinians would find themselves jobless.