The ACT government will review its investments in companies linked to settlements in the illegally occupied Palestinian territories.
Labor members agreed to an amended motion from the Greens requiring the government seek advice on the investments, while also calling for a humanitarian ceasefire.
The Greens initially called for the government to divest completely from nine companies but the amended motion will only seek advice on the divestments.
But Labor only agreed to seek advice about the investments.
"It is certainly appropriate to review in light of this information," Chief Minister Andrew Barr said.
The Liberals voted against the motion.
The Greens initial motion called on the government to divest its shares in nine companies which it said the United Nations Office of the High Commissioner for Human Rights had listed as being complicit in the establishment and maintenance of illegal settlements in the occupied Palestinian Territories.
The Greens' motion listed the following companies: Airbnb Inc, Alstom SA, Bank Hapoalim BM, Bank Leumi Le-Israel BM, Booking Holdings Inc, Expedia Group Inc, Israel Discount Bank Ltd, Mizrahi Tefahot Bank Ltd and Motorola Solutions Inc.
ACT Greens anti-racism spokesman Andrew Braddock said he was pleased the government would explore divestments.
"Divestment from these companies sends a very clear signal that the ACT should not be connected to, or financially benefit from companies identified by the United Nations as complicit in human rights violations through these illegal settlements," he said.
Labor backbencher Michael Pettersson, who has attended pro-Palestinian protests in Canberra, told the Assembly exploring divesting was a tangible action the government could undertake to address the humanitarian crisis.
"A core principle of this government is that public money should only be spent with businesses that uphold high ethical standards; the government's investments should be held to that same high ethical standards," Mr Pettersson said.
"Which is why I support the ACT government seeking advice on the current policy settings for our investments and the consideration of companies involved in, or profiting from, any human rights violations including the illegal occupation of the Palestinian territories."
The Assembly also noted the "the Hamas attacks commencing 7 October 2023 involving the targeting and death of Israeli civilians, including women and children, the taking of hostages, and widespread rocket fire into civilian area".
It then noted the "the immense loss of life and human suffering occurring in the Gaza Strip, including that of women and children due to Israeli military action".
The Greens wanted the Assembly to acknowledge "apartheid being inflicted on Palestinians" but Labor did not agree to this.
The motion also called on Assembly members to condemn all forms of racism - including anti-Semitism and Islamophobia.
Satellite imagery analysed by the United Nations Satellite Centre shows that 30 per cent of Gaza Strip's buildings have been destroyed or damaged in the Israel offensive in the densely populated Palestinian enclave.
Israel's assault has killed more than 27,000 Palestinians, according to health authorities in the Hamas-run territory. The assault was launched in response to attacks by Hamas militants in southern Israel on October 7 in which 1200 were killed.
