The Co-operative Group has thrown out a boycott motion calling for complete severance of trade with Israel.
A motion submitted by the group's South and West membership region on Saturday declared: "This annual general meeting resolves that our Society stops the sale of all Israeli goods."
But after a debate the motion was overwhelmingly rejected by 83 per cent of delegates at the Co-op's meeting in its Manchester headquarters.
Supporters of a boycott have been rallying members in recent weeks to force boycott motions through the group's seven regional memberships.