Critics say the so-called “transparency bill” will target groups advocating Palestinian rights while leaving right wing, pro-settlement NGOs able to keep the origin of their donations hidden.Both the European Union and the US have voiced their concerns. A spokesperson for the European Commission said it goes “beyond the legitimate need for transparency” and seems to be aimed at constraining the activities of civil society organisations working in Israel.

The bill, which was passed by a vote of 57-48 in the Israeli Knesset last night, requires groups that receive more than half of their funding from abroad to declare this in dealings with officials, on TV, newspapers, billboards and online.

It was sponsored by justice minister Ayelet Shaked and supported by prime minister Binyamin Netanyahu, who has described it as “democratic and necessary”.

But opponents have claimed the bill is discriminatory as it mainly applies to groups that oppose Israel’s policies towards Palestinians and settlements, and receive money from governments and bodies equally critical of this like the EU.

Pro-settlement organisations, which support the construction of Jewish settlements on occupied Palestinian lands, are unlikely to be affected. Such organisations tend to receive private donations from overseas, which are not covered in the bill.

“It is a law whose only aim is to silence and mark those who dare to voice criticism of the government or against settlements,” one of Israel’s most prominent human rights NGOs, Peace Now, said in a statement, according to Reuters.