The Norwegian parliament on Wednesday rejected moves to toughen rules on its sovereign wealth fund investing in companies operating in the occupied West Bank.
Lawmakers voted by 88 to 16 against a proposal to order the fund to withdraw from companies "that contribute to Israel's war crimes and the illegal occupation" of the West Bank.
Norway's sovereign wealth fund, fuelled by vast revenue from the country's oil and gas exports, is the biggest the world and has nearly $1.65 trillion invested around the globe.
The government though is under pressure to use its financial clout to influence Israeli policy in the Gaza Strip and the West Bank, where its settlement policy has been deemed illegal under international law.
In a letter signed by about 50 non-governmental organisations, Norway's main union LO called on the Labour government to ensure that the fund's investments were in line with the country's legal obligations.
The UN special rapporteur on the occupied Palestinian territories on May 20 urged Oslo to "fully and unconditionally divest from all entities linked to Israel's unlawful presence in the occupied Palestinian territory".
Francesca Albanese said Norway's fund held $121.5 billion -- or 6.9 percent of its total value -- in companies "involved in supporting or enabling egregious violations of international law in the occupied Palestinian territories".
Norwegian Finance Minister Jens Stoltenberg in response called for an end to violence, the liberation of Israeli hostages kidnapped on October 7, 2023 and the resumption of humanitarian aid.
But he said the fund's investments "do not violate Norway's obligations under international law".
The fund is regulated by a raft of ethical rules and has already divested from 11 companies because of their activities in the occupied West Bank.
In May, it withdrew its investment in Paz Retail and Energy, which distributes fuel in Israeli settlements.
Relations between Norway and Israel have soured since May 2024, when the country joined Spain and Ireland in recognising the state of Palestine.
