Israeli Foreign Minister Gideon Sa'ar warned European Union countries against imposing sanctions on Tel Aviv, stressing that they would face an appropriate response.
In a post on his official X platform page on Wednesday, he said that the recommendations of the European Commission, headed by von der Leyen, represent a moral and political distortion.
He added:"Any action against Israel will harm Europe's interests, and any action against us will be met with an appropriate response, and we hope we will not have to do so."
Commission President Ursula von der Leyen said the horrific events taking place in Gaza on a daily basis must stop.
She continued: There must be an immediate ceasefire, unrestricted access for all humanitarian aid, and the release of all hostages held by Hamas.
Based on its new proposals, Brussels is pushing to suspend parts of a cooperation agreement with Israel that allows for reduced customs duties on goods imported from the country.
Officials say the move will affect more than a third of Israel's exports to the EU, valued at approximately €6 billion, including key agricultural products such as dates and nuts.
The Commission also called for freezing the assets of two far-right Israeli ministers, Finance Minister Bezalel Smotrich and National Security Minister Itamar Ben-Gvir, who are responsible for fueling violence through their extremist rhetoric.
These measures, first proposed by Commission President Ursula von der Leyen in a major speech last week, represent the most stringent attempt yet to pressure Israel.
The European move came amid a new wave of international condemnation of Israel following its expansion of its ground operation in Gaza City.
The army carried out a massive bombardment of Gaza City before dawn on Tuesday, while its forces moved deep into the city.