Jewish settlers at Einabus, on the West Bank, in 2003. Photograph: Vadim Ghirda/AP
This of course isn't the first time the charity sector has been used to support Israel at the expense of the Palestinians. Many of the charities operating in the West Bank and Gaza are getting Israel off the hook of its responsibilities as an occupying power. Also let's not forget Oxfam's love affair with Starbucks.Peace Oil, an olive oil made in Israel by Jews and Arabs, would seem an ideal Christmas gift for those wishing to take a stand against consumerism.
The oil is one of the products promoted in the Good Gifts catalogue, run by the Charities Advisory Trust (Cat), an organisation founded by Hilary Blume and widely respected for advising charities on ethical ways of generating funds.
The blurb on the Peace Oil website claims the product encourages cooperation between communities. By helping to market the olive oil, Cat hopes to bring economic prosperity to such enterprises, thereby encouraging others.
Despite its laudable intentions, however, Cat has come under fire from those who claim it is undermining products made by Palestinians and brought into Britain by cooperatives such as Zaytoun.
The Palestine Solidarity Campaign, Jews for Justice for Palestinians, the UK branch of the Israeli Committee Against House Demolitions and the Inter-Faith Group for Morally Responsible Investment, have written to church and charity groups urging them to promote Palestinian olive oil rather than Peace Oil.
The groups claim that without costly advertising, Palestinian products struggle to find space on shelves in UK health food shops, charity outlets and the occasional supermarket.
"As an Israeli-based product, albeit with some Palestinian input, Peace Oil faces none of these limitations," the groups said in a joint statement.
"We hope that the Charities Advisory Trust will take this on board and, at the very least, promote fairly traded Palestinian oil from Zaytoun alongside Peace Oil.
"Until this happens we would urge those who want to give olive oil as a 'good gift' to choose Zaytoun in preference."
Olive oil, the backbone of the Palestinian Authority's agricultural economy, is a vital source of income for tens of thousands of farmers and their families, 67% of whom live below the poverty line.
Palestinian olive oil producers have faced enormous difficulties as Israeli authorities have confiscated or denied access to land, uprooted ancient trees, and controlled water resources. The building of the security barrier has cut off some farmers from their olive groves. Once the wall is completed, 10% of the West Bank will fall on the Israeli side of the barrier.
Zaytoun was established in 2004 to ease access to western markets for Palestinian farmers in the West Bank.
Heather Gardner, a Zaytoun director, said Cat was misleading the public in promoting Peace Oil as a product that encourages peaceful cooperation.
"The fact that Arabs are employed in making Peace Oil is not anything different from the status quo, as Israelis use Arab labour as a matter of course," she said.
She also criticised Peace Oil for its lack of transparency about where the oil is sourced and what the profits are used for. Zaytoun, a member of the International Fair Trade Association, is audited by a Swiss company.
Activists also question the claim that funds from Peace Oil will be used to promote a just peace between Palestinians and Israelis. One activist, who preferred to remain anonymous, was scathing about the product.
"It's a total con," the activitist said. "Peace Oil is using peace to obfuscate the lack of justice for Palestinians in the conflict. It is misleading people of goodwill who want to do something for peace."
Hilary Blume, a director of Cat, strongly defended the idea of Peace Oil, which she said had caught people's imagination since it was introduced a year ago.
"It's Jews, Druze, Bedouin working together," she said. "It's concerned with spreading cooperation among ethnically diverse groups."
Blume, who has worked to bridge ethnic divides in places such as Sarajevo, hit back at critics of Peace Oil, saying the groups wanted a trade boycott of Israel.
She said Peace Oil for cooking, one of three varieties of the oil, uses olives from smallhold farmers from Nablus in the West Bank.
Many of the presents in the Good Gifts catalogue, one of Blume's ideas, are designed to help people in developing countries become more self-sufficient. For example, a £25 gift buys five chickens and a cockerel; £100 buys a travelling library for African schools.
No other gift in the catalogue has attracted the kind of controversy that Peace Oil has faced. Asked why Cat chose not to promote Zaytoun, Blume said it was a commercial product and Cat could not help every cause in the world.
"You can find Zaytoun in every church group in the country," Blume said. "If they can't market it effectively, it's their problem."