Government formation talks continue this week and one of the sticking points that has emerged is the Occupied Territories Bill, according to insiders.
The bill would ban all trade with the settlements in the territories occupied by Israel in Palestine.
Fianna Fáil and the Greens back it but Fine Gael is strongly opposed, saying the Attorney General's advice is that it may contravene EU law.
ICTU's David Joyce says Fine Gael's claim of its illegality under EU law is shaky.
"There's plenty of legal opinion around on this - much of it in support of the Bill," said Mr Joyce.
"But Fine Gael insisting on unpublished advice from the Attorney General is not really a sustainable position given the chorus of eminent legal voices who say it can be done."
Mr Joyce says Irish support for Palestine must move beyond criticising Israel.
"We'd be saying that that support needs to move beyond mere condemnation and needs really ending that culture of impunity enjoyed by Israeli authorities and ensuring that states like Ireland who could view this as an opportunity to take a lead in the EU and act on their international obligation not to render aid or assistance towards an illegal situation."