The Presbyterian Church (USA) yesterday reversed its 2004 vote to begin divesting from select companies doing business in Israel and withdrew its blanket condemnation of the separation barrier between Israelis and Palestinians.

The church's General Assembly voted 483-28 to affirm a church policy of investing only in peaceful pursuits and to handle questions regarding investments in Israel and the occupied territories through its ``customary corporate engagement process," which would no longer single out Israel in its investment policy.

That returned the position of the nation's largest Presbyterian denomination, which has 2.4 million members, to where it was two years ago, before the General Assembly's last convention. That is when the assembly set off a firestorm of controversy by voting, 431-62, to selectively divest from multinational corporations operating in Israel.

Taken by surprise at that time, American Jewish organizations and Presbyterian communities that had strong relations with Jewish groups criticized the assembly for its unfair treatment of Israel. Supporters of Israel saw the development as a victory for a pro-Palestinian campaign to liken Israel to South Africa.

``We acknowledge that the actions" taken in 2004 ``caused hurt and misunderstanding among many members of the Jewish community and within our Presbyterian communion," the assembly said in its resolution yesterday. ``We are grieved by the pain that this has caused, accept responsibility for the flaws in our process, and ask for a new season of mutual understanding and dialogue."

A proposal to attach to the resolution an affirmation of Presbyterian solidarity with the Palestinian people failed, 237-273.

The divestment issue was hotly debated in local presbyteries -- regional groupings of Presbyterian churches -- in the months leading up to the convention, and numerous proposals supporting, rescinding, or modifying the national church's stance were submitted for consideration in Birmingham, Ala., where the meeting was held.

The Presbytery of Boston voted in March, 48-32, in favor of the divestment process, but a group of local ministers joined Presbyterians from other areas and Jewish organizations petitioning the assembly to change its stance.

The Rev. Hurmon E. Hamilton of Roxbury Presbyterian Church, one of six Boston-area ministers who jointly appealed to the assembly to reject divestment, hailed yesterday's decision.

``This reversing of position... [is] a wonderful step," Hamilton said in a telephone interview. ``We have a calling to push both parties to the table of peace.... Divestment was one of the most ill-conceived actions in the recent history of our denomination."

A local official said that the leader of the Presbytery of Boston, the Rev. Wayne Parrish, would not be available for comment until after the Birmingham meeting sometime today.

Ethan Felson, associate executive director of the Jewish Council for Public Affairs, said in a telephone interview from Birmingham that Jews and Presbyterians learned much about each others' perceptions of the Middle East situation following the initial divestment vote.

Many Presbyterians' positions were ``honestly informed by a belief in pacifism, a belief that if you lay down your arms and turn the other cheek, you will get a peaceful result," he said, while for Jews the divestment tactic evoked memories of boycotts by Arab nations that were attempting to destroy the Jewish state.

He said dozens of national Jewish organizations helped persuade Presbyterians to change their position but that they opted for low-key, local dialogue, rather than a campaign of op-ed articles and media advertisements.

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