The UN has said 206 companies — mostly Israeli and American — are facing a review of their business practices involving Israeli settlements, which are considered illegal under international law.

In a long-awaited report, the UN’s human rights office said more resources are needed to handle the complex and unprecedented task of compiling what some critics call an unfair “blacklist” and a sign of alleged anti-Israel bias at the UN.

Proponents of the move insist that companies must be held accountable for their activities in the settlements, arguing that those actions can contribute to injustices against Palestinians.

The 16-page report does not cite companies by name. The office said it had contacted 64 firms, but it would not identify any until all 206 had been contacted — and possibly not at all.

Of those companies, 143 are based in Israel or the settlements, and 22 in the US. Of the 19 other countries linked to such companies, Germany is home to seven and the Netherlands to five.

Ultimately, the rights office’s review could lead to a public naming and shaming of companies for their activities linked to the settlements and give an UN imprimatur to efforts championed by the “BDS” movement (boycott, divest and sanction), which has been primarily a grassroots campaign to pressure Israel through action against companies.

“The violations of human rights associated with the settlements are pervasive and devastating, reaching every facet of Palestinian life,” the report said, citing restrictions on movement, freedom of religion, education and land ownership faced by Palestinians in east Jerusalem and the West Bank.

“Businesses play a central role in furthering the establishment, maintenance and expansion of Israeli settlements.

“Business enterprises may need to consider whether it is possible to engage in such an environment in a manner that respects human rights.”

Some 115 other companies were eliminated after an initial review.

Israel and the United States have been sharply critical of a resolution passed by the 47-member Human Rights Council in March 2016 that paved the way for the review — the first of its kind. The resolution called on the rights office to create “database” of companies found to engage in any of 10 activities, either explicitly linked to the settlements or supportive of them.

Zeid Ra’ad al-Hussein, the UN High Commissioner for Human Rights, said: “I urge all sides to avoid misrepresenting the contents of this report, which has been produced in good faith on the basis of the mandate laid down by the Human Rights Council.”

He said he hopes the database “will assist states and businesses in complying with their obligations and responsibilities under international law”.

Israel’s Ambassador to the United Nations, Danny Danon, criticised the timing of the report’s release, and vowed to fight the release of any “blacklist” of companies.

AP