Scarlett Johansson has parted ways with the international charity Oxfam because of a dispute over her work for SodaStream, a company operating in a West Bank settlement that features the Hollywood star in an ad that will air during the Super Bowl.
Johansson became the latest casualty of a widening campaign to boycott the settlements, drawing attention to a larger debate about whether Israel will become an international pariah, at a steep economic price, if it fails to reach a peace deal with the Palestinians.
Israeli Finance Minister Yair Lapid stoked such fears this week, warning that if negotiations break down "and we enter a reality of a European boycott, even a very partial one, Israel's economy will retreat backward and every Israeli citizen will feel it straight in the pocket."
His comments reflected a growing sense in Israel that the coming weeks will be decisive for the country's future.
US Secretary of State John Kerry is formulating ideas for an Israeli-Palestinian framework agreement and is expected to present them next month. Israeli and Palestinian leaders have baulked at some of his expected proposals and, if sticking to their positions, could derail what is widely seen as a last chance for ending a long-festering conflict.
Meanwhile, European officials have warned that Israel could face deepening economic isolation if it presses forward with the construction of settlements in the West Bank and east Jerusalem, war-won lands the Palestinians want for their state. The fate of dozens of settlements, home to 550,000 Israelis, is a key sticking point in the talks.
Johansson, 29, stepped into that controversy this month when she agreed to become a global brand ambassador for SodaStream, a Tel Aviv-based company that makes home soda machines and has its main plant in an Israeli industrial park next to the West Bank settlement of Maaleh Adumim.
The actress, nominated four times for a Golden Globe, is to appear in a SodaStream ad during the Super Bowl on Sunday.
Her decision riled Oxfam International, a humanitarian aid organisation for which she had served as global ambassador for eight years, helping raise donations for victims of natural disasters in Indonesia and the Philippines, among other causes.
On Wednesday, Johansson said in a statement that she was stepping down from that role, citing a "fundamental difference of opinion" with Oxfam. The actress, whose movies over the past two years include The Avengers and Her, said she supports economic cooperation between "a democratic Israel and Palestine."
Oxfam accepted her resignation Thursday. The organisation said it believes SodaStream and other businesses operating in West Bank settlements contribute to the "denial of rights of the Palestinian communities that we work to support."
The charity said it opposes all trade with Israeli settlements, deemed illegal by most of the international community.
Johansson was one of 17 celebrity ambassadors for Oxfam. Others who are continuing in that role include the band Coldplay, pop singer Annie Lennox and US actress Kristin Davis of Sex and the City fame, the organisation said.
Davis was involved in a similar controversy as Johansson. She stepped away from her Oxfam duties while appearing in ads for Ahava, a cosmetics firm that manufactures in a West Bank settlement, but then returned to the charity.
The Palestinian-led movement of boycott, divestment and sanctions (BDS) on Thursday welcomed the controversy surrounding Johansson, even though she decided to stay with SodaStream.
"Without doubt, the biggest loser in this well publicised BDS campaign was SodaStream, which was exposed to the whole world as an occupation profiteer," said Omar Barghouti, a leader of the movement founded in 2005 by Palestinian grassroots activists.
The BDS campaign has won support from activists around the world, and recently scored a number of successes. Among other things, a small but growing number of European businesses and pension funds have dropped investments or limited trade recently with Israeli firms involved in West Bank settlements.
BDS activists promote different objectives, with some focusing on a boycott of the settlements and others saying everything Israeli must be shunned until there is a peace deal.
BDS supporters argue that Israel will withdraw from war-won lands only if it has a price to pay for continuing the occupation. Israeli leaders dismiss such claims, pointing to their willingness to negotiate a land-for-peace deal with the Palestinians.
In an interview with Associated Press Television News on Wednesday, SodaStream's chief executive, Dan Birnbaum, shrugged off the boycott campaign.
"To the best of my knowledge, we have not lost a single customer," he said. "If anything, it advances our awareness around the world, because people are talking about SodaStream."
He said the company does not want to "sacrifice" the jobs of 500 Palestinians who work in the SodaStream factory "for some political cause" of activist groups.
Johansson was chastised by some and praised by others.
Barghouti said in a statement that she "reminds us of the few unprincipled artists who during the struggle against South African apartheid sold their souls and stood on the wrong side of history."
The World Jewish Congress praised her as "a role model for others confronted with insidious anti-Israeli pressure."
A call placed to Johansson's representative by The Associated Press on Thursday was not immediately returned.
In Israel, the potential danger of a widening boycott, once dismissed as a fringe issue, is increasingly taking center stage in public debate.
The Israeli Treasury has examined various scenarios, and Lapid, the finance minister, said the results are worrying.
Even in the case of a limited boycott that reduces Israeli exports to the European Union by 20 per cent, the damage would amount to about US$5.7 billion (NZ$6.9 billion) in exports annually, he said.
Israel's GDP - just under US$260 billion in 2011, according to the World Bank - would lose about US$3 billion each year, he told a high-profile security conference in Tel Aviv late Wednesday.
Intelligence Minister Yuval Steinitz from Prime Minister Benjamin Netanyahu's hard-line Likud Party played down the risks, saying Israel "has the tools to prevent boycotts." He did not elaborate.
Steinitz, a former finance minister, told Israel Radio on Thursday that any deal that endangers Israel's security would do far more economic damage than a boycott.