The call came at the end of an Organization of Islamic Cooperation (OIC) summit in Indonesia, the world's most populous Muslim-majority country.
The summit brought together representatives of 57 states. The Middle East quartet and permanent members of the UN Security Council were also represented.
Indonesia’s President Joko “Jokowi” Widodo, said the entire world is concerned by the deterioration of the situation in Palestine and criticized Israel’s “unilateral and illegal policies.”
An OIC resolution urged “member states and the wider international community to ban products produced in or by illegal Israeli settlements from their markets.”
However, the move was not binding on member states, the Daily Star reported.
Settlements refer to Jewish communities built in areas occupied by Israel since 1967. Such settlements are illegal under international law and major stumbling blocks to peace efforts, with those in the West Bank and East Jerusalem built on land which Palestinians see as part of their future state.
The issue of goods imported from settlements has caused tensions with Israel in the past.
At the end of Monday’s summit, the OIC also pledged “full support to the political, diplomatic and legal efforts” to ensure the Palestinians achieved their “inalienable rights.”
The Jakarta meeting was attended by leaders including Palestinian president Mahmoud Abbas. It came amid a five-month wave of violence in Israel and the Palestinian territories that has killed 181 Palestinians as well as 28 Israelis.