Airbnb's decision not to go ahead with excluding Jewish settlements in the West Bank from its accommodation listings Palestinian condemnation on Wednesday and accusations that it was helping to perpetuate Israeli occupation.
Heeding calls from Palestinians who want the West Bank for a future state, Airbnb had said in November it would remove the listings of some 200 settlement homes.
That decision was deplored by Israel and challenged in some U.S. jurisdictions.
Announcing a resolution of lawsuits brought against it, Airbnb said it "will not move forward with implementing the removal of listings in the West Bank from the platform."
Chief Palestinian Negotiator Saeb Erekat said in a statement that this "signals the complicity of the company with the systematic denial of our inalienable right to self-determination."
He said Airbnb's announcement that it would take no profits from its activities in the West Bank "is nothing but a shameful attempt at whitewashing their complicity."
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There was no official comment from Israel, which held a national election on Tuesday.
Most world powers view Israel's construction of settlements on occupied land as a violation of international law, and Palestinians say it is wrong for companies to profit from them. Israel captured the West Bank in the 1967 Middle East war.
Airbnb was sued over its proposed delisting of West Bank apartments last November in Jerusalem District Court and, separately, in U.S. federal courts in Delaware and California.
The Israeli lawsuit, a class action, accused the company of "outrageous discrimination" and demanded monetary damages.
The Delaware lawsuit accused Airbnb of violating U.S. housing discrimination law by excluding Jewish-owned properties while letting Muslims and Christians continue to use Airbnb to let their accommodation. The California lawsuit made similar claims.
Airbnb has denied that its West Bank delisting plan targeted Israel in general. "Airbnb has never boycotted Israel, Israeli businesses, or the more than 20,000 Israeli hosts who are active on the Airbnb platform," the company statement said.