More than 100 French and British former diplomats have said Palestine is being erased in front of the world’s eyes and called for urgent action including trade and arms sales bans to press Israel to accept a Palestinian state.

An unprecedented joint letter dispenses with diplomatic language by accusing Israel of ethnic cleansing and warning that the world no longer sees Israel as a genuine democracy.

Arguing that Britain and France played a key role in the formation of the modern-day Middle East and noting that both countries took the step of recognising Palestine as a state in 2025, the diplomats contend that their countries now have a responsibility “to make common cause on the region’s fundamental fault line – equal rights for Israeli and Palestinians”.

The letter, addressed to the French president, Emmanuel Macron, and the British prime minister, Andy Burnham, has been signed by 52 French former diplomats and 50 British former ambassadors, many of whom served in the Middle East, in senior posts in Egypt, Iran, Bahrain, Israel, Syria, Turkey, Kuwait, Saudi Arabia and Qatar.

The list of British diplomats include two former envoys to the UN, Jeremy Greenstock and Emyr Jones Parry, and a former Foreign Office director of the Middle East, Edward Chaplin. The French signatories include Patrice Paoli, a former Middle East director at the French foreign ministry, and Stanislas de Laboulaye, a former consul general in Jerusalem.

The letter, given to the Guardian and Le Monde, is published two days after the UK and France along with nine other countries condemned the Israeli government’s publication of construction tenders for the E1 settlement project, saying the proposed housing “will take Israel further from peace and undermine its international standing”.

That statement contained no clear threat of consequences apart from a warning to businesses in their jurisdictions not to become involved in bidding since there could be legal and reputational consequences arising from investing in the construction of an unlawful settlement.

The UK foreign secretary, Ed Miliband, described the tenders for 1,200 homes bisecting the West Bank as a destructive threat to the viability of a two-state solution and summoned the most senior Israeli diplomat currently in the UK, the chargée d’affaires, Daniela Grudsky Ekstein.

In response, Israel’s foreign minister, Gideon Sa’ar, vowed Israel would not remain passive, saying the “Jewish people have a right to live throughout Israel just as British people have a right to live throughout the UK”.

The diplomats hope their letter will put pressure on Macron and Burnham to impose specific penalties on Israel in an effort to keep the two-state solution alive.

Diplomacy surrounding the terms for Israel’s withdrawal from Gaza has largely been subcontracted to the negotiations between Israel and Jared Kushner, Donald Trump’s son-in-law and envoy, but Israel has rejected the latest 15-point US-led peace plan for Gaza, leading to criticism from eight Muslim countries including the United Arab Emirates, Israel’s closest Muslim ally. They said Israel’s actions “fundamentally undermine the collective efforts undertaken to achieve a just and lasting peace”.

An internal debate has swirled among diplomats over whether the Israeli prime minister, Benjamin Netanyahu, through military and political provocations, is seeking to goad countries into reprisals that will help his chances in elections, due on 27 October.

The former diplomats argue the overdue step of recognising Palestine “needs to be made real by urgent action to safeguard the Palestinian right to self-determination, as the Israeli government seeks to destroy any prospect of an independent Palestinian state, showing contempt for the law, the rulings of the international court of justice and countless UN security council resolutions”.

They write: “Our governments care about the security of the Israeli people, just as they are appalled by the suffering of the Palestinian people under occupation. Hamas committed heinous crimes on 7 October 2023, but nothing justifies Israel’s systematic policy of destruction of Gaza and its population. Mr Netanyahu’s assertion that Israel must live by the sword is morally wrong and counterproductive. It imperils Israel’s security and leaves no room for negotiation. As a result, the world no longer sees Israel as a genuine democracy – there is nothing democratic about depriving others of their rights and land.

“In Gaza, 2 million Palestinians are kettled into 30% of their devastated land, hungry, lacking medicine and housing. Over 1,200 Palestinians have been killed since the so-called ‘ceasefire’. In East Jerusalem and the rest of the West Bank, Palestinian house demolitions and rampant settler violence – with the connivance of the Israeli army and police – amount to ethnic cleansing. Palestine is being erased before our eyes. This policy of occupation and destruction extends to Lebanon – where many villages have been razed – and Syria. It is a stain on the conscience of humanity, requiring the UK and France to act.”

They urge the two states to take seven policy steps:

• Uphold the decisions of the international court of justice and the international criminal court.

• Suspend the EU-Israel association agreement and the UK-Israel trade and partnership agreement for breach of human rights provisions.

• Suspend arms transfers to and from Israel and all bilateral military cooperation.

• Insist on unrestricted aid access to Gaza, led by the UN Relief and Works Agency, other UN agencies and international NGOs, with consequences for non-compliance, and access too for journalists, diplomats and parliamentarians.

• Ban all trade with settlements, including goods, investment, insurance and other financial services.

• Warn potential bidders for the “red line” E1 settlement or other settlement financing/construction that their interests in and with the UK and France will suffer.

• Make it an offence for British and French citizens to buy property on stolen Palestinian land and remove charitable status from “charities” funding settlements.

The diplomats balance their criticism of Israel by saying Palestinians “have to ensure that the state recognised by over two-thirds of the world is democratic and law-abiding, despite the occupation. Gaza and the West Bank need to be reunited politically, administratively and economically. Palestine’s political leadership is unrepresentative and dysfunctional. The elections in November [in Palestine] must lead to democratic renewal.”

But they argue: “While our two governments can do much to help Palestine to be a fully functioning democratic nation, the focus needs to be on Israel’s determination to prevent that outcome.”

The Israeli embassy in London was contacted for comment.