The Knesset passed Monday a law penalizing persons or organizations that boycott Israel or the settlements, by a vote of 47 to 38.

Prime Minister Benjamin Netanyahu was not present during the vote. MK Zeev Elkin (Likud), who proposed the law, said the law is not meant to silence people, but "to protect the citizens of Israel."

Members of the Knesset voting on a bill, July 11, 2011 Michal Fattal

According to the law, a person or an organization calling for the boycott of Israel, including the settlements, can be sued by the boycott's targets without having to prove that they sustained damage. The court will then decide how much compensation is to be paid. The second part of the law says a person or a company that declare a boycott of Israel or the settlements will not be able to bid in government tenders.

MK Nitzan Horowitz from Meretz blasted the law, calling it outrageous and shameful. "We are dealing with a legislation that is an embarrassment to Israeli democracy and makes people around the world wonder if there is actually a democracy here," he said. Ilan Gilon, another Meretz MK, said the law would further delegitimize Israel.

Kadima opposition party spokesman said the Netanyahu government is damaging Israel. "Netanyahu has crossed a red line of political foolishness today and national irresponsibility, knowing the meaning of the law and it's severity, while giving in to the extreme right that is taking over the Likkud."

On Sunday, Prime Minister Benjamin Netanyahu held discussions with Speaker of the Knesset, Reuven Rivlin and MK Elkin. The three discussed whether to have the Knesset vote on the law on Monday, a day after MK Dan Meridor warned that approving the law on the same day of the Quartet meeting may cause damage to Israel. Before midnight on Sunday the prime minister's office announced there is no reason to delay the vote.

Before the vote, the Knesset's legal adviser, attorney Eyal Yanon, published a legal assessment saying parts of the law edge towards "illegality and perhaps beyond." He went on to warn that the law "damages the core of freedom of expression in Israel." Yanon's assessment contradicts that of Attorney General Yehuda Weinstein, who said the bill is legal.

Peace Now movement announced Monday it opened a Facebook page calling for a boycott of products that come from the settlements. On Tuesday it plans to launch a national campaign, with the aim of convincing tens of thousands of people to support the boycott.