The pension board of the United Methodist Church — one of the largest Protestant denominations in the United States, with more than seven million members — has placed five Israeli banks on a list of companies that it will not invest in for human rights reasons, the board said in a statement on Tuesday.

It appeared to be the first time that a pension fund of a large American church had taken such a step regarding the Israeli banks, which help finance settlement construction in occupied Palestinian territories. Most of the world considers those settlements illegal.

Palestinian advocates, both in and outside the church, described the step as an important advance in the Boycott, Divest and Sanction campaign, or B.D.S., an international effort to pressure Israel economically over the Palestinian issue. Others within the church, however, called those claims misleading, noting that the church remains invested in other Israeli companies and that members had overwhelmingly opposed divestment resolutions.

There was no immediate comment from Israeli officials.

Nonetheless, the inclusion of Israeli banks on what is essentially a blacklist compiled by the pension board of a large American church, appears bound to upset the Israeli government, which devotes considerable effort to combating resolutions by academic institutions, businesses and church organizations to divest from Israeli companies over the issue of Israeli settlements and the occupation of Palestinian lands held since the 1967 war.