A leading body for Anglican Christians urged churches on Friday to put pressure on firms that support Israel's presence in the territories, a measure some say could mean selling stock as a last resort.
The resolution passed unanimously by the Anglican Consultative Council, meeting in the central English city of Nottingham, also recommended the same measures for any business that supports violence against innocent Israelis.
But it is the stance on the occupation that has drawn most attention and criticism both inside and outside the church.
The office of Britain's chief rabbi condemned the decision.
The resolution's supporters say it reflects deep concern about the suffering of Palestinians. They also say churches who hold stakes in firms they want to pressure should first try to get them to change their practices.
"If we do decide to go ahead with this, then it would be in terms of corporate engagement rather than divestment," said Brian Grieves, a U.S. Anglican clergyman.
But he added: "If the company is unresponsive ... Then you have to consider your options, of which selling the stock is one."
Opponents, who include the former Archbishop of Canterbury George Carey, have argued that the resolution will antagonize Israelis and harm efforts to bring peace to the Middle East.
The decision follows moves by the U.S. Presbyterian Church to consider selling holdings in companies that profit from "the occupation" and a statement by the World Council of Churches, a global body uniting non-Catholic Christians, backing divestment.
The Episcopal Church, the main Anglican church in the United States, is also studying what action it might take against companies involved in home demolitions, settlement building and other activity connected with Israel's presence in the territories.
Jewish groups upset
Discussions about divestment have upset Jewish groups, which accuse its backers of one-sided thinking about the Middle East.
"Moves toward divestment represent a flawed and disastrous course. They will do nothing to advance the twin causes of security for Israel and statehood for the Palestinians," said Rabbi Barry Marcus, an adviser to Britain's chief rabbi Jonathan Sacks.
"I am amazed that the ACC feels that passing these resolutions will have a constructive and helpful impact."
The council in Nottingham commended "the resolve of the Episcopal Church (USA) to take appropriate action where it finds that its corporate investments support the occupation of Palestinian lands or violence against innocent Israelis."
It also commended that "such a process to other provinces having such investments, to be considered in line with their adopted ethical investment strategies."
The council's decisions are not binding but it is one of four key institutions in the 77-million member Anglican church.
The resolution also encourages churches to back investments supporting the infrastructure of a future Palestinian state.