There is a budding movement by foreign investors and activists to join a Palestinian campaign against companies doing business in the West Bank - aimed at hitting them in their pockets.

Pension funds in Norway and Sweden have divested themselves of holdings in some firms involved in building in settlements or helping to erect Israel's contentious West Bank separation barrier.

European activists are cranking up pressure on companies by exposing the West Bank ties and picketing stores that sell settlement goods. And some major U.S. churches are questioning companies as a precursor to possible divestment.

The economic impact is still negligible. Jewish groups are pushing back and key institutions, including U.S. universities, have rejected calls to divest.

But in business, where image is all-important, it's tough to shrug off potentially negative publicity.

Israel accuses boycott advocates of trying to delegitimize the Jewish state.

It also argues that plenty of companies with ties to states with horrendous human rights records are not similarly targeted.

The focus on corporate involvement comes against the backdrop of a wider Palestinian movement of divestment and boycott, inspired by the economic assault on apartheid-era South Africa.

The Palestinians hope such pressure will achieve what years of negotiations have not - end Israel's occupation of the West Bank and east Jerusalem, lands they want for a state. Israel withdrew all forces and settlers from the Gaza Strip, the other territory claimed by the Palestinians, in 2005.

While the Palestinians seek a blanket boycott of Israel, many foreign supporters do not.

This is not divestment from Israel. It's divestment from companies supporting the occupation, said William Aldrich, head of the divestment task force at the New England Conference of the United Methodist Church.

Divestment is meant to make a moral statement, said Aldrich, whose group recommends that Methodists sell stock in 29 foreign and Israeli companies, though that call has not been adopted by his church at the national level.

The big success is that is has become an issue, added Merav Amir of the Tel Aviv-based Coalition of Women for Peace, whose database of companies has become a resource for investors and activists.

Israeli opposition leader Tzipi Livni, a former foreign minister who supports a West Bank pullout, said Israel should be concerned.

There is a trend of ideological consumerism in some of the world's countries, in addition to a delegitimization campaign against the state of Israel, she told a business conference Wednesday. I believe we have to light a few warning lights.

Foreign and Israeli companies operating in the West Bank have benefited over the years from cheap land, tax incentives and low-cost Palestinian labor. A growing settler population - 500,000 in the West Bank and east Jerusalem – has made it increasingly worthwhile for Israeli banks, supermarket chains and others to set up branches on war-won land.

With scrutiny intensifying, foreign companies and investments could be more vulnerable to pressure.

Results are still modest.

Norway's $500 billion oil fund, Europe's largest institutional investor, and Swedish pension funds managing more than $100 billion in assets have dropped the Israeli defense contractor Elbit Systems Ltd., which provides surveillance equipment for the separation barrier.

The funds say Elbit violated ethical norms because of its involvement in the barrier, ruled illegal in a nonbinding decision by the International Court of Justice. Israel says it built the barrier to keep out Palestinian militants, but it swerves through the West Bank to incorporate Jewish settlements on the Israeli side.

Norway's investment in Elbit was $6 million, negligible for a company valued at $2 billion. Elbit won't discuss the divestments. The Norwegian fund also sold its $1.2 million in shares in Africa Israel Investments, which has a real estate holding that builds in settlements.

The Brussels-based bank Dexia, targeted by Belgian activists for lending to settlements, said its Israeli subsidiary is phasing out the settlement business. Assa Abloy, a Swedish lock maker, said it would move its Israeli factory from a settlement industrial park to Israel proper within a year.

SodaStream, a maker of home carbonating systems, said some of the $109 million raised in a public offering in November is to be used to build a new factory outside the West Bank, though it won't say whether it would eventually close an existing settlement facility.

Some major Christian denominations also are wrestling with the divestment issue.

The World Council of Churches, which represents 560 million Christians, has called for responsible investment and a boycott of settlement products.

The Presbyterians are trying to persuade several multinationals to cut West Bank ties and leave open the possibility of future divestment. The United Methodists buried a divestment bill at a 2008 convention, though activists say they'll try again in 2012.

For now, boycott and divestment don't affect the Israeli economy or the businesses, said Israela Many, chief economist at the Federation of Israeli Chambers of Commerce. The problem is, it creates a negative image, she said.

Mark Regev, an Israeli government spokesman, alleged that boycotters show very selective indignation and ignore egregious human rights abuses elsewhere, including in Libya, Syria and Iran.

The Scandinavian pension funds deny singling out Israel.

There is no country perspective on this, said Annika Anderson of the Ethical Council that advises four Swedish pension funds. She noted that the funds have dropped nine other companies from around the world since 2007.

The Norwegian fund, which invests in more than 8,000 firms, has dropped 49 companies worldwide, including those making cluster bombs and cigarettes. The list includes Lockheed Martin, Boeing and Wal-Mart.

The fund's decisions are closely watched by other investors in Scandinavia.

Being excluded by the oil fund can cause massive damage to a company's reputation in those countries, said Caroline Liinanki, editor of the Nordic Region Pensions and Investment News at the Financial Times. You don't want to end up on the black list.