Home-sharing platform Airbnb on Tuesday announced it will back off a plan to remove Jewish settler homes in the occupied West Bank from its rental listings to end lawsuits brought by hosts.
The agreement settles all legal actions brought by hosts and potential hosts who went to court with concerns about listings, according to Airbnb.
Israeli lawyers filed a class action suit against Airbnb in November immediately after it said it planned to remove from its rental listings Jewish settler homes in the West Bank "that are at the core of the dispute between Israelis and Palestinians."
"Airbnb will not move forward with implementing the removal of listings in the West Bank from the platform," the San Francisco-based company said Tuesday in a news release.
"We will continue to allow listings throughout all of the West Bank, but Airbnb will take no profits from this activity in the region."
Profit generated from Airbnb listings in the West Bank will be donated to non-profit groups dedicated to humanitarian aid in various parts of the world, according to the startup.
Airbnb added that it will implement the same approach for listings in Moscow-backed separatist regions South Ossetia and Abkhazia, two other disputed areas where the company previously planned to take action.
The class action suit had sought ILS 15,000 ($4,183) in damages for the lead plaintiff and each other settler host should Airbnb delete them from its listings, a spokesman said earlier.
The decision would have affected around 200 homes in Israeli settlements that had been listed on the platform.
Around 400,000 Israelis live in settlements that dot the West Bank and range in size from tiny hamlets to large towns, in addition to 200,000 living in settlements in annexed East Jerusalem.
The international community considers the settlements to be illegal and a barrier to peace between Israelis and Palestinians.
A major campaigner against Airbnb's earlier decision told AFP that "Airbnb has realized what we have long argued -- that boycotts of Jews anywhere, even just in the West Bank, are discriminatory.
"This is a huge blow to efforts to delegitimize the Jewish presence in the West Bank," said Eugene Kontorovich, Director of International Law at the Jerusalem-based Kohelet Policy Forum.
But Arvind Ganesan, of New York-based Human Rights Watch, called Airbnb's retreat from the decision disappointing.
"Donating profits from unlawful settlement listings, as they've promised to do, does nothing to remedy the 'human suffering' they have acknowledged that their activities cause," Ganesan said.
"By continuing to do business in settlements, they remain complicit in the abuses settlements trigger."
Israel's Prime Minister Benjamin Netanyahu had pledged to annex settlements in the occupied West Bank if he wins Tuesday's election.
Exit polls showed him neck-and-neck with his main challenger, Benny Gantz.
An Amnesty International report published early this year argued that digital tourism giants Airbnb, Booking.com, Expedia and TripAdvisor are profiting from "war crimes" by offering services in Israeli settlements.
The London-based rights group's "Destination: Occupation" report called on the companies to stop listing tourist accommodation, activities and attractions in settlements in occupied territories, including East Jerusalem.
"In doing business with settlements, all four companies are contributing to, and profiting from, the maintenance, development and expansion of illegal settlements, which amount to war crimes under international criminal law," the report said.
Israeli public security minister Gilad Erdan threatened to bar Amnesty from access to the Jewish state over its charge.
Israel sees the movement to end illegal settlements in the West Bank as a strategic threat and accuses it of anti-Semitism -- a claim activists deny, saying they want only to see an end to Israel's occupation.
Amnesty launched a campaign in 2017 calling on governments to prevent businesses based in their countries from operating in settlements.
Israel passed legislation that same year banning entry to foreigners who support boycotting the country or its settlements.