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Richard Falk, the independent special rapporteur on human rights in the Palestinian Territories, said the companies - which include Hewlett Packard, Motorola, Volvo and Caterpillar - should be boycotted until they adhered to international rights standards and practices. Settlements built on territory Israel captured in a 1967 war remain a key obstacle to a resumption of Palestinian-Israeli peace talks stalled since late 2010. About 311,000 Israeli settlers and 2.5 million Palestinians live in the West Bank. "The focus on business activities is partly an expression of frustration about the inability to obtain compliance with these fundamental legal obligations of Israel and the ineffectiveness of the U.N. efforts to condemn settlement expansion," Falk, a U.S. academic who is himself Jewish, told a news conference. "There have been calls on Israel for literally decades to stop building the settlements," he said. "The effort to reach out beyond the traditional way that the U.N. condemns things is an effort to take our role seriously enough to feel that we should try to use what influence we have to change behavior." The United Nations deems all Israeli settlements in the West Bank to be illegal. Israel disputes this and distinguishes between about 120 settlements it has sanctioned and about 100 outposts erected by settlers without authorization. U.S. Ambassador to the United Nations, Susan Rice, rejected Falk's report, while the Israeli U.N. mission described it as "grossly biased" and "completely divorced from reality." "His call for a boycott of private companies is irresponsible and unacceptable," Rice said in a statement. "Mr. Falk's recommendations do nothing to further a peaceful settlement to the Israeli-Palestinian conflict and indeed poison the environment for peace." CONTROVERSIAL FIGURE The Palestinians want to establish a state in the West Bank, Gaza and East Jerusalem and say settlements deny them a contiguous, viable entity. There have been more than two decades of efforts to negotiate the creation of a Palestinian state. "The whole issue of Palestinian self-determination is at risk here," Falk said. "I would connect closely this effort to give concreteness to our concern by holding businesses that do profitable activities (in the West Bank) responsible with these fundamental issues of self-determination." Palestinian President Mahmoud Abbas is also pushing for an upgrade of its U.N. status to a sovereign country, which would allow it to join bodies such as the International Criminal Court and file complaints against Israel for its continued occupation. Falk lists 13 companies in his report to the U.N. General Assembly, but notes that this is a small portion of the businesses operating or dealing in the Jewish settlements. Aside from the boycott, Falk also urged civil society to pursue legal and political redress against companies "especially where allegations of war crimes and crimes against humanity can be substantiated in relation to settlement activities." Caterpillar said in a statement that Falk's report was inaccurate and misleading and "reflects his personal and negative opinions toward Israel." The company said it sells products to the U.S. government, which are then sent to Israel. Hewlett Packard said Falk was "far from an independent and unbiased expert in this matter" and that the company has a strong human rights policy and complies with the highest standards in every market in which they operate. Motorola and Volvo were not immediately available for comment. Falk has long been a controversial figure. In 2011 he wrote on his blog that there had been an "apparent cover-up" by U.S. authorities over the September 11, 2001 attacks and he also posted an anti-Semitic cartoon, which was later removed. He was appointed by the Geneva-based Human Rights Council to his position in 2008, but Israel has barred him from entering the country or occupied territories under its control. (Editing by Todd Eastham) World United Nations Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above. 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