French telecoms giant Orange said Thursday it wanted to withdraw its brand from Israel, spurring Prime Minister Benjamin Netanyahu to demand that Paris distance itself from the company's "miserable" decision.
Orange's statement came just hours after its chief executive was accused of giving in to a pro-Palestinian campaign.
Orange, which is partly controlled by the French government, insisted that its decision to end its brand-licensing agreement with Partner, Israel's second largest mobile operator, was not politically motivated.
But Israel lashed out at the decision, which appeared to be related to Partner's operations in the occupied West Bank.
Citing its own "brand development strategy", Orange said it did not wish to maintain a brand presence in countries "in which is it not an operator", while distancing itself from the politics.
"In this context, and while strictly adhering to existing agreements, the Group ultimately wishes to end this brand licence agreement," it said.
The storm erupted on Wednesday when Orange chief executive Stephane Richard told reporters in Cairo that the company was planning to withdraw from Israel.
His remarks touched a raw nerve in Israel, which is growing increasingly concerned about global boycott efforts and the impact on its image abroad.
"I call on the French government to publicly renounce the miserable remarks and the miserable action of a company that is under its partial ownership," Netanyahu said after Orange's announcement on Thursday.
"I call on our friends to unconditionally declare -– in a loud and clear voice –- that they oppose any kind of boycott of the state of the Jews," he added.
President Reuven Rivlin said that "boycott" and "delegitimation" efforts against Israel existed even before the state's creation and the motivation was "no different" from today.
Isaac Benbenisti, who becomes chairman of Partner on July 1, said he was "very, very angry", accusing Richard of caving in to "very significant pressure" from pro-Palestinian activists and joining a global campaign to isolate Israel.
The US-based Simon Wiesenthal Center said that because France owns a 25-percent stake in Orange, the French government should get involved.
"We are calling on President Hollande to intervene in this shocking betrayal of the world's only democracy in the Middle East," Wiesenthal officials said in a statement.
The United States, a staunch ally of Israel, appeared reluctant to engage on the matter, with a State Department spokeswoman saying: "in general ... our position on boycotts hasn't changed." In other words, Washington is opposed.
- End of the affair -
With the controversy in full swing, Orange's deputy director Pierre Louette told AFP that the company would continue to run a research centre and an online media services enterprise in Israel.
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"We are not withdrawing from Israel," he said, adding that "one must not try to make a big deal out of a simple issue of company rights".
Still, Richard's remarks dominated the headlines in Israel's media outlets where he was cast as a supporter of the boycott movement.
Although the Orange boss did not directly refer to Jewish settlements, his remarks in Cairo came after the publication on May 6 of a report accusing the telecoms giant of indirectly supporting settlement activity through its relationship with Partner.
Compiled by five mainly French NGOs and two trade unions, the report accuses Partner of building on confiscated Palestinian land, and urges Orange to cut business ties and publicly declare its desire to avoid contributing to the economic viability of the settlements.
The international community regards all Israeli construction on Palestinian land seized during the 1967 Six-Day War as illegal.
Challenged in Cairo, Richard said: "Our intention is to withdraw from Israel. It will take time" but "for sure we will do it".
"I am ready to do this tomorrow morning... but without exposing Orange to huge risks," he said.
Orange says it holds no shares nor voting rights in Partner Communications, nor does it have any influence over the firm's strategy.
Orange and Partner are linked by a licensing agreement which allows the Israeli firm to use its brand and logo in exchange for a fee. The contract was signed in 1998, two years before the telecoms giant was acquired by France Telecom.
The contract, initially open-ended, was recently amended by Orange and now expires in 2025.
- Anti-Israel is 'in' -
The crisis comes after days of introspection in Israel over its place in the world, as it struggles to tackle a growing Palestinian-led boycott campaign which has had a number of high-profile successes.
Known as the BDS movement -- boycott, divestment and sanctions -- it aims to exert political and economic pressure over Israel's occupation of the Palestinian territories in a bid to repeat the success of the campaign which ended apartheid in South Africa.
This week, Britain's National Union of Students voted to affiliate itself with the BDS movement, in a move which drew a sharp rebuke from Netanyahu.
Last week, Israel narrowly avoided expulsion from FIFA after the Palestinians withdrew a resolution calling on it to ban its Israeli counterpart.
The boycott movement was even debated in parliament on Wednesday.
"It's not politically correct to be anti-Semitic today but it's super 'in' to be anti-Israel," Justice Minister Ayelet Shaked told MPs.