UKLFI wrote to council chief executive Tom McCall warning that the motion could breach the authority’s own constitution and be “discriminatory”.
The group also accused the Palestine Solidarity Society at Queen’s University Belfast of promoting “unlawful action”.
UKLFI director David Lewis said the movers of the motion had shown “responsibility” in withdrawing it.
A spokesman for the QUB Palestine Solidarity Society said he was “disgusted” by UKLFI’s involvement.
Cllr McGreevy did not respond to requests for a comment.