The Church of England is expected to face condemnation from Jewish leaders after it voted to disinvest from companies whose products are used by the Israeli government in the occupied territories.

In a surprise move, the General Synod voted to back a call from the Episcopal Church in Jerusalem and the Middle East for "morally responsible investment in the Palestinian occupied territories".

In particular, the Synod backed the Jerusalem church's call for the Church Commissioners to disinvest from "companies profiting from the illegal occupation", such as Caterpillar Inc. Caterpillar, a US company, manufactures bulldozers used in clearance projects in the occupied territories, and also used by Palestinians in their own rebuilding work.

The motion was passed overwhelmingly, in spite of strong lobbying from leading members of Britain's Jewish community, concerned that Israel's right to protect itself from suicide bombers and other Palestinian terror attacks should not be compromised. No time was made to debate an amending motion put forward by Anglicans for Israel, the new and influential pro-Israel lobby group.

The motion came from Keith Malcouronne, a lay member from the Guildford diocese. He moved that the synod "heed the call from our sister church, the Episcopal Church in Jerusalem and the Middle East, for morally responsible investment in the Palestinian occupied territories and, in particular, to disinvest from companies profiting from the illegal occupation, such as Caterpillar Inc, until they change their policies".

Mr Malcouronne also urged synod members to visit Israel "to see recent house demolitions". He urged the Church's Ethical Investment Advisory Group, the body which resisted recent pressure from pro-Palestinian campaigning bodies to divest from Caterpillar, to "give weight to the illegality under international law of the activities in which Caterpillar Inc's equipment is involved".

The Church Commissioners have £2.2 million holdings in Caterpillar. Although the vote does not mean they will necessarily be sold, because the Commissioners do not have to comply, it has huge symbolism.

The Jewish community's distress will be augmented by the fact that the vote to disinvest was backed by the Archbishop of Canterbury, Dr Rowan Williams. By contrast, Dr Williams has so far not commented on the recent Palestinian election victory of Hamas, an organisation committed to destroying the state of Israel.

Among those expected to be angered are the Board of Deputies of British Jews, which at the last synod held a special presentation, the first of its kind, in an attempt to explain the plight of Israel and its need to protect itself from incessant terror attacks from its Palestinian community.

The Chief Rabbi Dr Jonathan Sacks is also expected to be concerned, as is the former Archbishop of Canterbury, Lord Carey of Clifton, who believes the Church should support Israel. Judaism is the mother religion of Christianity and Jesus Christ himself was Jewish.

In the debate Mr Maclouronne said that the Bishop of Jerusalem, the Right Rev Riah Hanna Abu El-Assal, had written to him urging the disinvestment cause.

The Bishop of Chelmsford, the Right Rev John Gladwin, said that Christians in Palestine were in despair. Although recent reports have indicated high level of Muslim persecution of Christians in Israel, Bishop Gladwin blamed the Israeli government for their plight.

Bishop Gladwin said: "Caterpilar may be a company being used for dreadful purposes across the world, but the problem is not Caterpillar, The problem is the situation in the Middle East and the government of Israel," he said.

The Rev Simon Butler, from Southwark, south London, warned Caterpillar that "in our understanding of sin, acts have consequences".

But the Bishop of St Albans, the Rt Rev Christopher Herbert, who is chairman of the Council of Christians and Jews, suggested that the debate was unbalanced. He said there was a "belief and hope" in the Jewish community that Christians would understand their perspective in such debates, but the Synod had not reflected the complexity of the situation.

Last summer the Anglican Consultative Council, representing the worldwide Church, backed a report urging divestment from companies that "support the occupation".

Lord Carey said at the time that approval of the report would be "disastrous" for peace efforts in the region. He said the Israelis already felt traumatised by attacks on them and this would be "another knife in the back".

The Chief Rabbi's office and the Board of Deputies also made strong private representations to Dr Williams. A spokesman for the Chief Rabbi said last summer that a policy of disinvestment "would not only be misguided, particularly at the present time, but it would have worrying effects on the long-established ties between Jewish and Anglican communities worldwide".

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