LEADERS of the Anglican Church set themselves on a collision course with the Jewish community yesterday when they backed a motion calling for provinces worldwide to reconsider their investments with Israel.

While stopping short of a direct call for disinvestment, the Anglican Consultative Council, the executive body of the Anglican Communion, commended the resolve of the US church to take appropriate action where it finds its corporate investments support the occupation of Palestinian lands or violence against innocent Israelis.

The council also asked other provinces to consider such action in line with their existing ethical investment strategies and to adopt investment strategies “that support the infrastructure of a future Palestinian state”.

Although the motion, based on a strongly worded report from the Anglican Peace and Justice Network, was toned down by the council after interventions by the Archbishop of Canterbury, Dr Rowan Williams, and the Dean of St Paul’s, Dr John Moses, it still represents the strongest statement to date by the Anglican Church on the difficulties in Israel and the territories.

One insider said: “What they have done amounts to moral pressure, but stops short of financial blackmail.”

It is not mandatory for the General Synod to accept the council’s motion, and another source said there would be “misgivings” at the highest levels about taking the recommendations on board in the Church of England. The Church’s own ethical investment group recently turned down calls to withdraw its £197,000 investment in the Caterpillar group, which makes bulldozers used in clearance projects in Israel.

The motion was amended to place any disinvestment within existing ethical investment policies, which most provinces already have and which already rule out, for example, holdings in the arms trade. Dr Moses told the council that a call for disinvestment would be “a major statement of policy”. Referring to the problems in Israel, he said both sides were working to resolve the issues. “I draw back from anything that might exacerbate the peaceful settlement that they might seek,” he said.

The authors of the report wanted the Anglican church to put pressure on companies supporting controversial policies in Israel, such as the security fence. The US Presbyterian Church has already adopted a disinvestment policy and at least one other US church is following a similar path.

Some Anglican provinces could now do the same, feeling mandated by the Anglican Consultative Council resolution.

Jewish leaders have expressed bitter disappointment that disinvestment is still on the table, although they are relieved that the recommendations were toned down to reflect a more measured approach.

Rabbi Barry Marcus, who holds the Israel portfolio on the Chief Rabbi’s Cabinet, said: “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. The report itself took a one-sided and subjective view of the situation, and did not reflect the present reality.

“Domestically, I am concerned about the unsettling effect the resolutions will have on Anglican-Jewish relations, particularly in the light of the recent aborted academic boycott of Israeli universities. We urge Anglicans, despite this development, to continue to support investment and negotiation rather than divestment and recrimination.”

The Board of Deputies of British Jews said that it was bitterly disappointed. A spokesman said: “Israel is a democracy and a pluralistic society in which Jews and Arabs, Christians and Muslims, have equal rights in the law. These rights are not extended to non-Muslims in many of Israel’s Arab neighbours. Sadly, Israel is also a country on a virtual war footing; not a conventional war, however, but a war of terror characterised by the suicide bomber. It is a war against an implacable enemy which considers all of Israel as occupied territory and where no Israelis, men, women or children, are regarded as innocent.”

He continued: “The report’s findings ... which predated the withdrawal plans for Gaza and now Bethlehem, were based on consultation with Palestinian groups hostile to Israel. No Israeli input was countenanced.”

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