Toronto's annual Gay Pride parade, considered a major event on Canada's cultural calendar, is threatening to devolve into confrontation - and not between gay and straight people.

Event organisers, responding to complaints from Jewish organisations, among others, have forbidden the activist group Queers Against Israeli Apartheid (QAIA) from marching in the parade under that name.

More accurately, Pride Toronto is "disallowing" use of the phrase "Israeli Apartheid" in the 2010 parade.

Organisers of the July 4 event say QAIA could march under the name "Queers in Favour of a Free Palestine," for example. But those in the QAIA camp have refused to comply and vow they will take part under their original banner, setting up a potential confrontation on the day of the event.

The municipal council of the City of Toronto this week withdrew a resolution to pull funding for the parade - which could contravene the city's anti-discrimination policy if it allowed the QAIA to participate. However, the pro-Israel federal government cut funding for the parade by dropping it from a tourism stimulus package.

The phrase 'Israeli apartheid' is being disallowed

"It's important to understand that Pride Toronto does not take a position on the conflict in the Middle East," event official Margaret Ngai stated on the group's website. "We are obliged to respect City policies in addition to legislations of all levels of government when considering freedom of expression."

There has been some backlash against the moves. Pride Toronto's choice for Grand Marshal of the 2010 parade refused his appointment, citing the organisation's "censorship" of QAIA. A local woman rejected Pride's appointment as "Honoured Dyke" for the same reason, and last week, two dozen past Gay Pride award recipients renounced their honours too.

Martin Gladstone, a Toronto Jewish lawyer and gay rights advocate who has led the campaign against QAIA, said the group's participation "clearly violates" the discrimination rules and creates "an exclusionary, poisonous environment". QAIA has "nothing to do with gay pride," he said.

Elle Flanders, spokeswomen for QAIA, said that "our voices will not be silenced". Founder of the Jewish Feminist Anti-Fascist League, she said QAIA has "been discriminated against as it relates to political affiliation... If we changed our name, we would condone censorship."

Meanwhile, organisers of Madrid's gay pride, which is due to take place in early July, have told the Israeli delegation that they are no welcome, citing security concerns. But Antonio Poveda, of Spain's Federation of Lesbians, Gays, Transexuals and Bisexuals said the move came in response to Israel's raid on the Gaza flotilla.

"After what happened, and as human rights campaigners, it seemed barbaric to us to have them taking part."