Switzerland is to reassess its relations with Israel, amid spiralling violence in the Middle East.
Economic and military relations were the areas most likely to be affected, the Foreign Ministry said on Wednesday.
"We have to consider the impact of the situation on the ground in the light of our relationship with Israel," Muriel Berset Kohen, a spokeswoman for the Foreign Ministry, told swissinfo.
"We've had very friendly relations with Israel [...]. Not so long ago, it was negotiating and signing agreements with the Palestinians - but we have to consider the consequences, now that the Prime Minister, Ariel Sharon, has described the situation as war."
Another Foreign Ministry spokesperson, Daniela Stoffel-Fatzer, said the measures were not tantamount to imposing sanctions on Israel.
The announcement came a day after Switzerland summoned the ambassador in Bern, Ygal Antebi, to demand an Israeli withdrawal from the Occupied Territories.
The Foreign Ministry on Tuesday told Antebi it disagreed with Israeli military operations in the West Bank, following last weekend's Palestinian suicide bombing.
"It's not everyday that we summon an ambassador of a friendly country, but we're very preoccupied," Berset Kohen said.
"We expect Israel to withdraw from the Palestinian Territories and to grant the President of the Palestinian Authority, Yasser Arafat, freedom of movement (...), because he has to carry out the functions for which he's been elected."
Last week, Switzerland backed a United Nations Security Council resolution calling on Israel to withdraw its forces from Palestinian cities.
Human rights violations
The Foreign Ministry also expressed concern at human rights violations committed by Israel on Palestinians.
"War and terrorism are in no way an excuse to violate humanitarian law," said Berset Kohen. "Humanitarian law has to be respected in every circumstance - that's clearly stated in all human rights conventions."
SFr1 million aid
In a separate development, the Swiss Development Agency announced on Wednesday that it would donate an additional SFr1 million to people living within the Occupied Territories.
The Agency said the money would be transferred to the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).