Plans to prevent public bodies from implementing their own boycotts against Israeli goods have cleared the Commons.

Councils and other public bodies will be unable to boycott goods or services from any country, except those exempted by ministers, under the proposed changes.

Ministers will not be able to exempt Israel, the occupied Palestinian territories or the Golan Heights from the remit of the Economic Activity of Public Bodies (Overseas Matters) Bill.

The focus on ensuring Israel cannot be targeted is aimed at combatting the Boycott, Divestment, Sanctions (BDS) movement, which opponents have claimed is divisive and antisemitic.

The Bill cleared the Commons on Wednesday and will now head to the House of Lords for further scrutiny.

Communities Secretary Michael Gove said the Bill was “a targeted and proportionate approach to dealing with a unique evil” and would prevent public bodies “taking decisions which conflict with UK Government foreign policy”.

He added: “There is a clear intention in this Bill which is to deal specifically with the BDS campaign, and the BDS’s campaign attempt to use local government and other intermediate institutions and their legitimacy to undermine the UK Government’s foreign policy.

“The UK Government – whichever colour of government it is – must speak with one voice on behalf of the whole United Kingdom when it comes to foreign policy matters.”

Mr Gove insisted the Bill does “not contravene in any way our foreign policy and does not in any way inhibit the UK Government from taking action if we believe that there is activity in the Occupied Palestinian Territories that requires to be called out by this Government”.

He also claimed the clause ensuring Israel cannot be exempted from the ban on boycotts “doesn’t prevent the Government establishing sanctions or using travel bans against those who have been linked to blatant human rights abuses”.

Ministers have in recent weeks said they are considering travel bans against Israeli settlers responsible for violence against Palestinians in the West Bank.

The Government faced opposition from Labour and their own backbenchers over the Bill’s conflation of the Occupied Palestinian Territories and the Golan Heights with Israel.

Explicitly equating Israel with the Occupied Palestinian Territories and the Golan Heights is an unprecedented step

Angela Rayner, Labour’s deputy leader said her party “completely opposes a policy of boycott, divestment and sanctions against Israel”, but described the Bill as “deeply flawed”.

She added: “Explicitly equating Israel with the Occupied Palestinian Territories and the Golan Heights is an unprecedented step. To my knowledge, this wording has never appeared in British statute before and it seriously undermines our country’s longstanding, consistent and cross-party support for a two-state solution.

“So, I could not be more disappointed. There are moments when all sides of this House come together to resolve deep-seated issues facing our communities. This could have been one of them, but instead the Government have refused to listen, and so as this Bill is read a third time we have had to put forward a reasoned amendment as a final plea for the Secretary of State to reconsider.”

However, Labour’s amendment calling for the Bill to be stopped in its tracks was rejected by MPs 284 to 228, majority 56.

The Government also faced opposition from its own backbenches, with Conservative former cabinet minister Kit Malthouse confirming he would vote against it.

He claimed the Bill would undermine the UK’s international status, telling MPs: “That… is a cause of great dismay to our allies in the Arab world, who of course we need at the moment more than ever to join us in seeking peace in this dreadful conflict that is taking place in the Middle East.

“That we should undermine our own status as fair dealers, if you like, in that part of the world seems to be an unforced error.”

SNP frontbencher Chris Stephens said: “Equating Israel and the Occupied Territories is unique in any legislation … and questions the long-established position that the UK has cross-party in supporting a two-state solution based on 1967 borders.”

Elsewhere, Labour backbencher Andy Slaughter predicted the Bill “will not see the light of day before a general election” following scrutiny in the House of Lords.

“It certainly shouldn’t, it will be a shameful legacy even for this Government,” the Hammersmith MP said.

Independent MP for Leicester East Claudia Webbe claimed it would prevent councils “from carrying out the will of the voters who elected them”, adding: “This Government has found itself yet again on the wrong side of the issue. Backing the oppressor against the oppressed and giving the Israeli regime licence to kill tens of thousands.”

Despite the opposition, MPs voted 282 to 235, majority 47, to give the Bill a third reading.

The division list showed there were eight Tory rebels voting against the Bill, including Alicia Kearns, the chair of the Foreign Affairs Committee, and former ministers Mr Malthouse, Vicky Ford, David Jones, and George Eustice.

They also included Flick Drummond (Meon Valley), William Wragg (Hazel Grove), and Paul Bristow (Peterborough).