Does the EU occupy territories outside of the EU and demand that produce from that territory must be labeled as "made in EU"? That was rhetorical so I'll go ahead and answer: no it doesn't... So why is it hypocritical? Oh and there is no question about it, no controversy and no way for Israel to unilaterally circumvent it: the settlements are illegal.
Turkish warplanes attack PKK targets after soldier killed in attack (Reuters)
from the article: Europe sticks a warning label on the settlements