In light of the "Danny Dayan fiasco", in which Brazil refused to accept the appointment of Danny Dayan as Israel's ambassador to Brazil due his having been a previous director of the Yesha Council, MK Issawi Frij (Meretz) has proposed another law that has about 0% chance of passing.

Frij has proposed that a person living outside the official sovereign borders of Israel cannot be appointed to serve as Ambassador or Consul or head of a delegation.

Frij says Netanyahu has turned the Foreign Ministry into an office that instead of building relations with other nations works to damage relations and provoke other nations, and to legitimize the settlers, settlements, and the occupation.
source: Srugim

This won't pass, and it shouldn't pass. Many of the settlers were sent to their settlements over the years by the Israeli governments. Sometimes directly, sometimes indirectly with encouragement. This is true of both Labor and Lid led governments. Let us not forget that Labor was really the father of the settlement movement, well before the Likud got involved. You can't just ban those people, people who participate fully in every other aspect of Israeli life - taxes, army, government, business, etc. and take away their rights.