The Jewish National Fund (JNF) is no stranger to controversy, its sectarian approach to charity work having fomented tension for decades in Israel and abroad. The JNF is once again embroiled in a row, though this time the tables have turned, with the fund's administrators finding themselves cast as pantomime villains by diehard supporters of the Jewish state.

The JNF's crime is its decision to donate 3,000 trees to a housing project run by the Palestinian Authority – a move creating fury among traditional backers of the JNF's operations. The national president of the Zionist Organisation of America (ZOA) pulled no punches in his impassioned reproach of the JNF, proclaiming his disgust at a situation which many neutrals would find little to be disparaging about:

We are deeply critical and indeed shocked by the decision of the JNF to donate thousands of trees, grown with money donated by Jews from around the world, to the PA. Has it really come to this? That a venerable Zionist organisation with only one purpose – the building-up of a sovereign Jewish national existence – takes money from Jews and then uses [the] funds to make a gift of trees to Israel's unreconstructed enemies?

That the ZOA's president considers the Palestinian Authority per se to be Israel's "unreconstructed enemies" speaks volumes about his, and his organisation's, attitude towards the conflict. However, even he should be able to see the benefit of such olive-branch-extending gestures on the part of a charity that is all too often accused of discrimination against non-Jewish residents of the region.

The JNF is almost 50 years older than the state itself, and was founded with the express aim of purchasing land in Ottoman Palestine exclusively for Jewish settlement. The fund is estimated to own 13% of the land in Israel, thanks to the massive work carried out by its emissaries over the last century. The ubiquitous blue box – the JNF's signature collection tin – can be found in homes and synagogues throughout the diaspora, and to most donors the fund is simply a benign vehicle for giving money to Israeli causes, rather than a tool of oppression against Israel's non-Jewish neighbours.

But to Palestinians, the JNF's work symbolises the ethnic division that has rent the land in two for more than 60 years. By earmarking land for Jewish use only, the JNF act in an even more separatist fashion than the Israeli government, and the JNF's pill has constantly proved far too bitter for the Palestinians to swallow.

Some critics accuse the JNF of attempting to erase Palestinian national history by planting forests over the ruins of former Palestinian towns and villages, while others claim that much of the JNF-administered land on the Israeli side of the Green Line was illegally taken from the Palestinians, and as such should be returned to its rightful owners. The JNF's refusal to lease land to Arabs was also the centre of a furore in recent years, with courtroom battles eventually forcing the fund to end its system of racial discrimination, despite heavy Knesset support for the JNF's original policies.

Now that the JNF has decided off its own bat to assist the Palestinian Authority with their ground-breaking project in Rawabi, this ought to be the time for its more level-headed supporters to encourage similarly progressive moves in future. Instead, the likes of the ZOA are spitting blood that any of their donations should be spent providing a better future for all who dwell in the area, rather than just the Jewish residents, and in doing so have made a shameful display of their true colours.

The mayor of Maaleh Adumim – one of the largest West Bank settlements – was equally furious in his condemnation of the JNF's latest action:

The] system has gone haywire ... If [the] JNF is to retain the confidence of American and world Jewry as to its dedicated purpose of building up the Jewish state of Israel, it is vital that the JNF publicly acknowledge its error and apologize for this clear misuse of funds it has raised. For the JNF to do otherwise would be to raise money from world Jewry under false pretenses. It is vital that [the] JNF never repeat this decision.

In response, a JNF spokesman pointed to the fact that the JNF is "mandated by the Israeli government as the national forest service for the Land of Israel. This project was carried out under that mandate". Rather than simply hiding behind the cloak of governmental backing, he might also have stressed that any initiative such as this which seeks to bridge the intolerable gulf between the two sides ought to be recognised by all involved as an invaluable service towards peacemaking efforts, since that is one area sorely lacking in the region of late.

The latest affair only serves to remind the watching world that it is near impossible to bring together the two sides while such resentment festers in both Israel and Palestine, whether on the part of supporters of extremist Palestinian factions or intractable nationalists in the Israeli camp. Meanwhile, the JNF's donation to the Palestinian Authority has not thus far been derailed by the criticism, and it can only be hoped that this is the first of many such moves to come.