Australia is facing the possibility of trade sanctions by Arab nations over its decision to stop referring to East Jerusalem as an occupied territory.Head of the Palestinian delegation to Canberra, Izzat Abdulhadi, warned Friday that Australia’s new stance on East Jerusalem, which was annexed by Israel in a move never recognized by the international community, was a ‘substantial policy shift’, according to Agence France-Presse (AFP).

‘We think that it’s very provocative and unuseful, and it’s not appropriate,’ he said.

Australia announced, last week, that it would no longer refer to East Jerusalem as ‘occupied’, stating that term carries ‘pejorative implications’ and was neither appropriate or useful.

Abdulhadi added that trade sanctions could be implemented against Canberra if the Australian government persisted with its stance, leaving the country isolated.

18 diplomats from a number of countries which include Indonesia, Egypt and Saudi Arabia protested to Australia’s Department of Foreign Affairs, on Thursday, prompting Abdulhadi’s statements, AFP reports.