The Trades Union Congress has voted to continue its boycott of Israeli goods from West Bank settlements and strengthen its links with the Palestine Solidarity Campaign.

A motion passed at the TUC congress in Manchester this afternoon stopped short of agreeing to a full boycott of Israel.

The TUC had been expected to extend its boycotts policy and encourage further disinvestment.

The move follows the agreement at last year’s conference to support a boycott of goods from Israeli settlements in the West Bank.

The motion voted through today stated: “Congress instructs the General Council to work closely with the PSC to actively encourage affiliates, employers and pension funds to disinvest from, and boycott the goods of, companies who profit from illegal settlements, the Occupation and the construction of the Wall.”

It had been expected that this part of the motion would also call for the council to actively organise its own boycott, but that line was dropped.

The resolution condemned the Histadrut (Israeli TUC) support for Israel’s action during May’s Gaza flotilla incident.

Delegates agreed that a report should be produced on the impact of the boycott and investment withdrawal strategy. The TUC will join other unions around the world to coordinate international “active solidarity to end the siege of Gaza and for a free Palestine”.

The motion was moved by the Transport Salaried Staffs' Association and supported by the GMB, UNISON, Fire Brigades’ Union and Public and Commercial Services Union.

PSC chairman Hugh Lanning said: “This motion builds on that passed at last year’s conference. It is a massive step forward in the movement for justice for the Palestinian people, and reflects growing public anger at Israel’s aggression towards the Palestinians and those, such as the humanitarians on the Gaza aid flotilla, who try to help them.”

He said the vote showed British union members were prepared to stand up “in support of an oppressed people” in the same way they had to end apartheid in South Africa.

A joint statement from the Jewish Leadership Council and Board of Deputies said: “The TUC rejection of a general boycott of Israeli goods, despite the efforts of the PSC, is good news, and a serious setback for the pro-boycott movement.

“We recognise the efforts of serious trade union, TUC and international TUC leaders in opposing this divisive measure.

“However, the tone of the TUC's resolution is at odds with the realities of Israeli-Palestinian Trade Union cooperation and the renewed peace process. We are also concerned that the resolution again mandates the TUC to work closely with the PSC, an organisation that does not share the TUC's support for a two-state solution.

“Communal leaders will be meeting the TUC leadership to raise these concerns.”

Israeli ambassador Ron Prosor called the decision appalling. He said: "It speaks volumes about the calibre of those who voted for it.

"Whilst many around the world are helping to create an environment for peace, some in the TUC prefer to create a noisy distraction.

"These people contrast sharply with those responsible leaders, who at that very same time, were offering hope to the people of the Middle East. This resolution, in comparison, is hopeless, in both senses of the word."