The Palestinian Solidarity Campaign (PSC) had their account at the UK bank Alliance and Leicester closed at the same time as the Friends of al-Aqsa (FoAA), another British group that campaigns on behalf of Palestinians, had their account closed by the Royal Bank of Scotland.
The Royal Bank of Scotland rescinded the decision after protests by FoAA and other Palestinian support groups. PSC's bank account with the Alliance and Leicester has remained closed, however.
Neither of the groups is proscribed by the British government.
A number of Arab and Muslim charities in Europe say they have been unfairly scrutinised by US authorities recently, and some have even been accused of funding terrorism.
"In July we received a letter from Alliance and Leicester that they were closing our account with 30 days notice, because they were reviewing accounts of clubs and societies," Betty Hunter, general secretary of the PSC, told Aljazeera.net on Monday.
"We appealed. We wanted to know what was the basis of this was. They refused to tell us anything until just before Christmas when they told it was for commercial reasons," she said.
"We thought that
maybe anything to
do with Palestinians
with the banks"
Palestinian Solidarity Campaign
"We think it is political. We have never been in the red. We have never had any complaints," she added.
Zoe Mars, PSC's treasurer, told Aljazeera.net: "We thought that maybe anything to do with Palestinians was problematic with them. They have never given us any explanation."
In 2003 PSC had a $2900 donation to Mustafa al-Barghuthi's medical charity that was transferred through the Alliance and Leicester stopped by the US Treasury.
Ismael Patel, the chair of FoAA who also had his personal and business accounts closed, told Aljazeera.net that the Royal Bank of Scotland also refused explanation for their actions.
"We had absolutely no joy - they wouldn't talk to us," Patel said.
"We turned to public support and we had overwhelming support. After about five days we had a response - they called it a human error," he said.
The US is targeting Palestinian
groups that raise funds abroad
Mick Napier of the Scottish Palestinian Solidarity Campaign told Aljazeera.net that his group's plans to hold a protest outside the headquarters of the Royal Bank of Scotland may have been a factor in the bank's decision to backtrack.
"We organised a large protest outside the banks headquarters. The day before the protest they call FoAA and rescinded their decision. They were very keen for protests not to go ahead," he said.
PSC is considering suing the Alliance and Leicester, saying the closure of the account will cost the group up to $20,000, as well as hours of time for the group's volunteer staff.
A spokeswoman for the Alliance and Leicester told Aljazeera.net the reasons behind the closure of PSC's bank account was neither "political or racial".