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 on Tuesday 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 Jewish Leadership Council and Board of Deputies said the rejection of a boycott of all Israeli goods represented a "serious setback for the pro-boycott movement".

A delegation from the JLC, Israeli Embassy and Trade Union Friends of Israel (TUFI) attended the conference. Communal leaders are now planning to meet the TUC leadership to raise concerns about the motion.

Rejection of a general boycott is a setback for pro-boycott movement

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.

It 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 a section of the resolution would also call for the council actively to organise its own boycott, but that line was dropped.

There was condemnation of the Histadrut (Israeli TUC) support for Israel's action during May's Gaza flotilla incident.

Delegates also 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".

TUFI director Steve Scott said: "There was some pretty filthy stuff in there, but it's not a full boycott so that's something.

"It's not the best but it's better than it could have been. This at least creates an environment for the TUC and Histadrut to work together, but the criticism of Histadrut was uncalled for."

He said the current direct Israeli-Palestinian peace talks had "aided the environment".

A joint JLC and Board statement said: "The TUC's rejection of a general boycott of Israeli goods, despite the efforts of the PSC, is good news.

"However, the tone of the 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."

Ambassador Ron Prosor said: "This appalling decision speaks volumes about the calibre of those who voted for it. While 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."

But PSC chairman Hugh Lanning 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.

TUC general secretary Brendan Barber failed to address a TUFI fringe meeting at the conference.