By Leila Miller

Sept 23 (Reuters) - Argentina's President JavierMilei on Wednesday willaddress world leaders at the United Nations General Assembly amid escalating tensions with Britain over oil exploration around the Falkland Islands, a largely self-governing British overseas territory whose sovereignty Argentina has long disputed.

Argentina earlier this month began sanctions proceedings against more than 60 companies and people linked to anoffshore oil drilling project, a move that British officials have strongly pushed back on. British Parliamentary Under-Secretary of State for Overseas TerritoriesUma Kumaran in a statement on Friday called Argentina's actions"unacceptable," saying that "the Falkland Islands are British and they have the right to develop their natural resources as they see fit."

Milei is likely to reaffirm Argentina's actions in his UN speech, analysts and political commentators say. On Thursday, he is due to meet with Israeli Prime Minister and close ally Benjamin Netanyahu. The Falklands oil drilling project has strong Israeli ties.

Argentina’s sovereignty claim to the islands in the South Atlantic thatit calls the Malvinasremains central to its national identity. The country invaded the archipelago in 1982 and fought a 10-week war that ended with Argentina's surrender to Britain and is still commemorated in Buenos Aires in street murals for the fallen soldiers.

In a televised address this month, Milei said the drilling project violates a 1976 UN General Assembly resolution urging both countries to resolve the sovereignty dispute through dialogue and avoid unilateral decisions.

His speech came days after US President Donald Trump, a Milei ally, suggested Washington could reconsider its traditionally neutral position on the Falklands dispute.

'SHIFT THE AGENDA'

Milei's tougher stance marks a notable shift for a president who had been criticized by political opponents for showing little interest in the sovereignty dispute while pursuing closer ties with the US and Europe. Now Argentina’s opposition is accusing Milei, who is expected to seek reelection in 2027, of using the dispute to bolster domestic support.

"It's simply something to look good in the eyes of society or to try to shift the agenda," said Guillermo Michel, a Peronist opposition congressman in the chamber of deputies.

However, a study by the Buenos Aires-based consultancy Inteligencia Analitica found that his televised address produced only a modest improvement in his public image.

“The Malvinas issue in Argentina transcends the president’s speech,” said MarceloEscolar, the firm's director.

Last week, Milei presented a bill that aims to toughen sanctions on those deemed to unlawfully participate in activities utilizing natural resources in Argentina's maritime spaces and continental shelf.

The bill will first be referred to committee, as the government weighs its legislative priorities.

Milei lacks a majority in Congress but has managed to pass important economic reforms. Marcelo Seghini, a defense adviser in the lower house, said that while some parts of the sovereignty bill may have bipartisan support, other provisions unrelated to the Falklands disputemay spur opposition.

Owners of the Sea ⁠Lion offshore ​project, Navitas Petroleum and Rockhopper Exploration, have indicated they do not expect Milei's actions to derail ​development.

(Reporting by Leila Miller in Buenos Aires. Editing by Lucinda Elliott and Rosalba O'Brien)