The Cabinet has approved drafting of legislation which will ban trade in goods with the occupied Palestinian territories.
This was proposed by Tánaiste and Minister for Foreign Affairs and Trade Simon Harris.
It will now go before an Oireachtas committee next month for pre-legislative scrutiny.
It is expected that the Tánaiste will return to Cabinet next month to secure ministerial approval for a "draft scheme" for the legislation and, after that, it will be referred to an Oireachtas Committee for scrutiny - also in June.
Labour Party whip Duncan Smith told the Dáil this afternoon that the Government's timeline was "simply unacceptable".
His party argues that the additional days should be secured for the Dáil to sit and get the legislation passed entirely before the summer break.
Ireland does minimal trade with the occupied Palestinian territory.
Mr Harris believes there is growing support at EU level on issues where Ireland demonstrated early leadership with a small group of partners, including on the review of Israel's compliance with its human rights obligations under the EU-Israel Association Agreement.
He said he hopes other European countries will follow Ireland's example and move to adopt legislation that will ban trade with occupied Palestinian territories.
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Speaking before a Cabinet meeting, Mr Harris said: "In many ways this is a small measure, but it is imperative on all countries do what we can to maximise the pressure and conditions to bring about a ceasefire because the scale of humanitarian disaster is almost unimaginable.
"It is certainly unconscionable and is certainly a war crime.
"What I hope today is when this small country in Europe makes the decision and becomes one of the first countries, and probably the first country, in the western world to consider legislation in this space, I do hope it inspires other European countries to join us."
Mr Harris said that Ireland also wanted to work at an EU level with the association agreement.
The Tánaiste said he continues to have "an open mind" on the inclusion of a ban on services in addition to goods in the occupied territories legislation.
Mr Harris thanked Senator Frances Black who first proposed an Occupied Territories Bill in 2018 and said he had a lot of engagement with her, including on the issue of services.
"We don't have a policy difference on this contrary to the misrepresentation of this by some in opposition," Mr Harris said.
He added that he did not want to pass legislation that "falls at the first legal hurdle" and he said he was willing to engage "to get the best and most robust piece of legislation."
"That is the purpose of Oireachtas Committees, to tease these things through, so I have an open mind in relation to (services)."
The Taoiseach said "there is an urgency on the entire world to put pressure on Israel to bring this war to an immediate end".
Micheál Martin described the Occupied Territories Bill as "important in terms of the ongoing horrors that are occurring in Gaza, and the absolute need for a ceasefire, the release of all hostages and the end to the slaughter that is occurring in Gaza right now".
"The indiscriminate bombing that is going on right now and the killing of families and the destruction of households is beyond any moral compass," Mr Martin said.
In a statement, Independent Senator Frances Black welcomed the decision by the Government to approve the draft Bill banning trade with occupied Palestinian territories.
She said: "Today's decision by Government is a really important and welcome step, but our work is not done yet.
"I first tabled the Occupied Territories Bill in 2018, and finally, after seven years of delay, I’m relieved we are finally seeing some action.
"It’s horrible that it has taken so much suffering to get here and we can’t afford to waste any more time.
"The onus is now on Government to act with the urgency this moment demands - to stand firmly against the horrific war crimes being committed both in Gaza and the West Bank."
Mr Harris will also ask Cabinet ministers to approve the participation of the Defence Forces in the United Nations Interim Force in Lebanon (UNIFIL) for a further period of 12 months.
Ireland’s participation in UNIFIL represents the State’s largest overseas deployment, with 345 Defence Forces personnel currently serving as part of a joint Irish-Polish Battalion in Southern Lebanon.
Separately in the area of trade, the Tánaiste will inform the Government that the EU has shared with the US its ideas for an "EU-US Agreement on Reciprocal Mutually Beneficial Trade".
This proposal includes options aimed at reducing tariffs and non-tariff barriers, promoting economic security, as well as facilitating strategic purchases, business opportunities and investment.
He will say that a far-reaching negotiated agreement that protects consumers, businesses and the economies on both sides of the Atlantic is the best outcome and that there is now no time to lose to achieve this.
However, given the ongoing volatility in the global trading environment, the Tánaiste will also ask Cabinet to approve the drafting of the Arbitration (Amendment) Bill 2025, which will allow for the ratification of the EU-Canada trade deal, known as CETA.
