Jewish leaders have slammed the “appalling” decision of the Quakers to divest of companies “profiting from the occupation of Palestine”.

The church – honoured this month for its role in rescuing thousands of Jewish children fleeing Nazi Europe on the Kindertransport 80 years ago – even appeared to link its decision to the ethical stance taken against the slave trade.

Quakers in Britain – also known as the Religious Society of Friends – announced they were boycotting settlement goods in 2011, but at the time said divestment and sanctions were not being considered.

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However, at this week’s yearly meeting of trustees, who manage a £25 million investment portfolio, church leaders said they had a “moral duty” to take a stand, more than half a century after Israeli forces first took control of the West Bank.

“With the occupation now in its 51st year and with no end in near sight, we believe we have a moral duty to state publicly that we will not invest in any company profiting from the occupation,” said recording clerk Paul Parker.

“We know this decision will be hard for some to hear. We hope they will understand that our beliefs compel us to speak out about injustices wherever we see them in the world, and not to shy away from difficult conversations.”

In 2014 the church urged the British government to recognise the State of Palestine, end arms sales to Israel, lobby Israel to end the blockade of Gaza, and help free Palestinian prisoners.

Reacting to news of the divestment this week, Board of Deputies President Marie van der Zyl said the decision showed the “obsessive and tunnel-vision approach that a narrow clique of church officials have taken in recent years”.

She accused the Quakers of “feeding a one-sided diet of propaganda,” adding: “While other churches have reached out to the Jewish community at this time of rising antisemitism and polarisation… the Quaker leadership has chosen to import a divisive conflict into our country, rather than export the peace we all want to see.”

On its website, the church said its decision “fits into a long Quaker history of pursuing ethical investments” and “follows decisions not to invest funds in, among others, the fossil fuel industry, arms companies, Apartheid South Africa, and… the transatlantic slave trade”.

The Council of Christians and Jews also criticised the decision, saying: “It is not easy to understand the purpose of the Quaker statement on divestment from ‘companies profiting from the occupation of Palestine’, since the Quaker community does not invest in any companies in the region. We note also that the Quaker community is not seeking to divest from any other current conflict in the world.”

They add that the Quakers’ position “does not acknowledge the injustices suffered by Palestinians and Israelis. Rather than choosing one narrative over another, we need to support Israelis and Palestinians equally in seeking a peaceful solution to this conflict.”