The union of Palestinian contractors on Monday announced a boycott a UN agency that allows Israeli firms to bid for construction work in the Gaza Strip.
The union said contractors would boycott all work for UNICEF "until they backtrack from their decision to take offers from Israeli companies and equate them with Palestinian companies."
Urging all local and official organizations to follow suit, the union said in a statement that hiring Israeli firms for projects in Gaza would reward Israel's siege of the enclave and destroy the Palestinian economy.
The decision to boycott followed a meeting between union leaders and UNICEF special representative Jean Gough.
In a statement, Gough said UNICEF purchased goods and services through a competitive bid process "from qualified Palestinian manufacturers, authorized dealers and companies.
"We only buy from other providers when goods are not available."
UNICEF is building a desalination unit in the Gaza Strip. The UN has estimated that almost 95 percent of water pumped in Gaza is unfit for drinking.
"We are committed to work with our Palestinian partners to ensure that this unit can be built without delay and with the best quality materials available, so that it can benefit Palestinian children as soon as possible," Gough said.
"The final decision on the continuation of this project is in the hands of our Palestinian counterparts and stakeholder."
UNICEF spokeswoman Catherine Weibel told Ma'an that the agency had invited bids from authorized dealers and manufacturers for the project but no company had yet been hired.
Reconstruction of the Gaza Strip following Israel's 3-week offensive in 2008 has been hampered by Israeli restrictions on bringing building materials into the enclave. Israel only allows construction materials into Gaza for projects run by international organizations.
The UN says over 3,500 homes were destroyed in the assault as well as industrial building and infrastructure for electricity, sanitation, water, and health.
Meanwhile, Israel's almost-total ban on exports from Gaza has strangled the economy, causing thousands of businesses and factories to close.