An American public relations firm with ties to President Obama has decided not to renew a contract to orchestrate a campaign aimed at breaking the blockade of the Gaza Strip after Jewish organisations expressed dismay at the arrangement.

Fenton Communications - which boasts on its website that "we only represent causes we believe in ourselves" -- was being paid $240,000 for communications work this year for Al Fakhoora, a group that participated in the flotilla to Gaza. The money came from the office of Sheikha Mozah bint Nasser Al Missned, the second wife of the emir of Qatar.

Fakhoora's stated mission is organising a campaign to secure education for Palestinian students in Gaza and the West Bank.

However, Farook Burney, the director of Fakhoora, told students at the Faculty of Islamic Studies at Qatar Foundation last month that "Al Fakhoora has launched an advocacy campaign to file legal charges against Israel and change the public perception in the West about its actions."

Mr Burney, a Canadian activist, was aboard the Mavi Marmara when Israeli commandos boarded the ship on May 31.

The contract was exposed earlier this month when Fenton filed a document under the Foreign Agents Registration Act. This was made public by the Israel Project, a non-profit group that promotes Israel's image.

Fenton is a well-known firm that is committed to liberal causes and is particularly well known for its work for MoveOn.org, a powerful fundraising vehicle for Mr Obama. It also counts several Jewish organisations amongst its clients, including the American Jewish World Service.

According to Joshual Berkman, a spokesman for AJWS, the group has been told by Fenton that it is ending its relationship with Fakhoora.

It is expected, however, to continue to work until the end of its contract on August 31.

Fenton - whose former senior vice-president, Jeremy Ben Ami, now heads J Street, the dovish Israel lobby group - did not return calls for comment.

Jennifer Laszlo Mizrahi, president of the Israel Project, applauded Fenton's decision to stop promoting Fakhoora.

"The bottom line is that I'm happy that an organisation that works for good organisations is not working for an organisation that is trying to undermine Israel," she said.

Ms Laszlo Mizrahi suggested Fenton should donate the money it earned from the contract to a Holocaust museum or other worthwhile organisation "to help atone for what they did".

Fenton had taken a lot of heat in the Jewish blogosphere over the contract.

The flap over Fenton speaks to a growing problem on the American left, said Ben Cohen, spokesman for the American Jewish Committee.

"There's a sense that the Arab cause is a priori progressive. Move.on wouldn't last five minutes in Qatar."