Bowing to pressure from pro-Palestinian Arab activists in America, the United Nations Children’s Fund is cutting ties with a billionaire Israeli donor, Lev Leviev, in response to allegations that one of his companies is financing the construction of settlements in the West Bank.

Activists had campaigned for several months for the aid organization to reject financial donations and other assistance from Mr. Leviev. In a letter to the advocacy group that led the drive, Adalah-NY, UNICEF said it had reviewed the matter at the group’s request and would meet its demands.

“UNICEF has concluded that it will not consider partnerships — direct or indirect — with Mr. Leviev or any of his corporate entities, and will not accept financial support that we know is from him or his corporate entities,” a senior communications adviser for UNICEF, Christopher de Bono, wrote.

The letter was posted on Adalah-NY’s Web site, alongside a statement from the New York-based pro-Palestinian organization praising UNICEF for its decision and congratulatory notes from local officials in West Bank towns where the settlements in question are under construction. Other groups opposed to Israel’s presence in the West Bank, such as Defence for Children International, have also issued statements lauding the decision.

Mr. de Bono told The New York Sun that UNICEF usually screens only formal partnerships with corporate and nonprofit partners, not individual donors such as Mr. Leviev, for violations of U.N. resolutions or regulations. The agency decided to investigate Mr. Leviev, who was born in Uzbekistan and made his fortune in diamonds after immigrating to Israel, following complaints from advocacy groups, Mr. de Bono said.

“We wouldn’t partner with someone the Security Council said was engaged in activity contrary to United Nations resolutions, like those regarding the settlements,” he said.

UNICEF also screens partners for connections to the gambling industry, Mr. de Bono added. Mr. Leviev’s company, Africa-Israel Investments Ltd., paid $625 million last year for a 60-acre parcel of land in Las Vegas on which it planned to develop a new casino. The purchase could have affected the UNICEF decision, though it is unrelated to the initial complaint brought forward by Adalah-NY.

A professor at Touro College and a senior fellow at the Hudson Institute, Anne Bayefsky, called the decision to break with Mr. Leviev “grotesque discrimination.”

“This is part and parcel of an ongoing U.N. effort to isolate, marginalize, and demonize Israelis and Israel as a whole,” Ms. Bayefsky, senior editor of the watchdog group Eye on the U.N., said in an interview. “UNICEF apparently has no problem taking money from thugs, dictators, and butchers the world over. But when it comes to money from Jews they suddenly have a problem. Let’s call it what it is: It’s racism.”

Targeting Mr. Leviev is “a double standard of the worst kind,” Ms. Bayefsky said, noting that the governments of several member nations that sit on UNICEF’s executive board, including Burma and Zimbabwe, are widely regarded by the international community as serial violators of human rights.

Mr. de Bono said UNICEF board members are chosen through a separate process than the one applied to assistance from nongovernmental organizations and donors. He added that UNICEF has “an ongoing relationship” with the Israeli government.

Representatives for Mr. Leviev did not respond to phone and e-mail messages.