More than 100 writers, including Pulitzer Prize winners Alice Walker, Richard Ford and Junot Díaz, have called on the PEN American Center “to reject support from the embassy of Israel” in a furious open letter.

Sent to PEN American Center and other festival participants in March but published online on Wednesday, the letter opposes the Israeli embassy’s sponsorship of PEN’s annual World Voices Festival (PWVF), a seven-day event in New York at the end of this month.

In the festival’s promotional materials, PEN America lists the Israeli embassy as a “champion” of the festival, one of the tiers of festival involvement, and a sponsor of theNinety Minutes, Three Minds panel discussion involving Ethiopian-born Israeli author Dalia Betolin-Sherman.

“It is deeply regrettable that the festival has chosen to accept sponsorship from the Israeli government, even as it intensifies its decades-long denial of basic rights to the Palestinian people, including the frequent targeting of Palestinian writers and journalists,” says the letter, sent by Adalah-NY, The New York Campaign for the Boycott of Israel, an American group that campaigns for boycott, divestment and sanctions against Israel.

Among the writers who have put their names to the protest are the former president and vice president of English PEN, Gillian Slovo and Kamila Shamsie; poet Eileen Myles; authors Louise Erdrich and Ahdaf Soueif; and the Palestinian writer Ahmad Qatamesh, whose imprisonment without charge by the Israeli government was criticised by PEN International.

The Colour Purple author Alice Walker said: “As a PEN member, I want this organisation that is supposed to be a champion of writers’ rights to stand up for Palestinian writers, academics and students who are suffering under a repressive Israeli regime that denies their right to freedom of expression. The last thing PEN should be doing is partnering with and promoting a government that denies Palestinians basic human rights.”

PEN American Center responded with an email to its members from author Colm Tóibín, who is chairing the 2016 festival, and Jakab Orsos, its director. Referring to its policy, formally adopted in 2007, the letter says the venue will not participate in “cultural boycotts of any kind – which impede individual free expression – no matter the cause”.

It adds: “In the dozen years since its founding, PWVF has received funding from many sources, including several dozen governments that have provided individual writers from their own countries with travel and other expenses. This includes the subsidies received for PWVF 2016.

“The diversity of our funding helps to ensure that programming decisions are our own. ‎It is important to note that national sponsorships of festival writers do not imply any endorsement of those governments’ policies, and have no bearing on PEN’s free expression advocacy decisions.”

Marilyn Hacker, recipient of PEN Voelcker award for poetry and PEN award for poetry in translation, said: “Even if PEN opposes all forms of boycotts, PEN should have policies and ethical standards in place forbidding partnerships with significant human rights abusers. On that basis alone, PEN should rule out a partnership with the Israeli government.”

PEN American Center spokeswoman Sarah Edkins said the Israeli embassy’s sponsorship “does not go towards overall festival costs” and only “covers the travel related costs for Israeli authors already selected by our team to participate”. She said the money went towards air fares, accommodation and interpreters for the Israeli authors.

The Israeli embassy has participated in the festival on and off since 2006, listed as a festival patron alongside the Australian government and the British Council in 2015. In the aftermath of the Gaza war in 2008 and 2009, Israel’s foreign ministry was granted an extra $2m to improve Israel’s global image, with the ministry’s then-deputy director general for cultural affairs Arye Mekel telling the New York Times: “We will send well-known novelists and writers overseas, theatre companies, exhibits. This way you show Israel’s prettier face, so we are not thought of purely in the context of war.”

The PEN American Center has been criticised by members of other PEN branches before. In 2015, more than 200 writers protested after it gave a freedom of expression award to the French satirical magazine Charlie Hebdo in the wake of the attack on its Paris offices earlier that year.

That letter said that by selecting Charlie Hebdo, PEN was “valorising selectively offensive material: material that intensifies the anti-Islamic, anti-Maghreb, anti-Arab sentiments already prevalent in the western world”.

• The headline on this article was amended on 7 April 2016 to better reflect the content of the report.