The Federal Emergency Management Agency stated in grant notices posted on Friday that states must follow its "terms and conditions." Those conditions require they certify they will not sever "commercial relations specifically with Israeli companies" to qualify for funding.
The requirement applies to at least $US1.9 billion ($A2.9 billion) that states rely on to cover search-and-rescue equipment, emergency manager salaries and backup power systems among other expenses, according to 11 agency grant notices reviewed by Reuters.
The requirement is the Trump administration's latest effort to use federal funding to promote its views on Israel.
The Department of Homeland Security, the agency that oversees FEMA, in April said that boycotting Israel is prohibited for states and cities receiving its grant funds.
FEMA separately said in July that US states will be required to spend part of their federal terrorism prevention funds on helping the government arrest migrants, an administration priority.
The Israel requirement takes aim at BDS, the Boycott, Divestment, and Sanctions movement designed to put economic pressure on Israel to end its occupation of Palestinian territories. The campaign's supporters grew more vocal in 2023, after Hamas attacked southern Israel and Israel invaded Gaza in response.
"DHS will enforce all antidiscrimination laws and policies, including as it relates to the BDS movement, which is expressly grounded in antisemitism," a spokesperson for Secretary of Homeland Security Kristi Noem said in a statement.
The requirement is largely symbolic. At least 34 states already have anti-BDS laws or policies, according to a University of Pennsylvania law journal.
FEMA's Israel requirement is "shameful," said Mahmoud Nawajaa of the BDS Movement in a statement on Monday.
The American Jewish Committee supports the Trump administration's policy, said Holly Huffnagle, the group's director of antisemitism policy. The AJC is an advocacy group that supports Israel.
Under one of the grant notices posted on Friday, FEMA will require major cities to agree to the Israel policy to receive a cut of $US553.5 million ($A856.4 million) set aside to prevent terrorism in dense areas.
New York is due to receive $US92.2 million ($A142.6 million) from the program, the most of all the recipients. Allocations are based on the agency's analysis of "relative risk of terrorism", according to the notice.
