The British author Ian McEwan, who received the Jerusalem Prize at this year's International Book Fair, said he will be donating the $10,000 award to Combatants for Peace.
The group was founded by Palestinians and Israelis who had previously taken an active part in fighting each other. Its representatives said they are committed to working to end the occupation and achieve a two-state solution.
McEwan met Thursday with group representatives Bassem Ararmin, Muhammed Aweida, Yoni Yahav and Roi Amit to hand them the prize money.
The novelist arrived in Israel to accept the prize on Sunday, despite calls to boycott the event. During his acceptance speech for the award, given every two years to a writer whose work deals with the "freedom of the individual in society," McEwan spoke out against Israeli policy regarding the Israel-Palestinian conflict.
He said he hoped Jerusalem "will look to the future of its children and the conflicts that potentially could engulf them, end the settlements and encroachments and aspire creatively to the open, respectful, plural condition of the novel."
McEwan also took part in the weekly demonstration in the East Jerusalem neighborhood of Sheikh Jarrah, along with Israeli author David Grossman, his personal friend.
Representatives of Combatants for Peace said they were pleased McEwan had decided to donate the prize money - which the author had received from Mayor Nir Barkat - to their group. According to one member, Barkat "implements the heavy-handed policy and discrimination against the residents of the city."
A representative of Combatants for Peace said the group pledges "to use the contribution to further our activities against injustice, oppression and denial of liberties - in the spirit of McEwan's remarks at the ceremony."