As New York’s labor unions struggle with the fiscal crisis gripping the city, a coalition of workers spent a rainy Friday night in December raising money for their brothers and sisters in the Middle East.

New York City Labor Against the War, a consortium of union members and labor activists, hosted Palestinian trade unionists Mohammed Aruri and Hekmat Elsarraj as part of their United States speaking tour on the unemployment and dire working conditions facing Palestinians.

“This is not about Jewish or Israeli,” said Aruri, an executive committee member of the Palestinian General Federation of Trade Unionists (PGFTU), which represents nearly 470,000 laborers–nearly 75 percent of the Palestinian workforce. “The issue is about the right to work,” he said. “It’s a basic human right that we don’t have.”

As national secretary of the Department of Legal Affairs in the West Bank, Aruri reports that as many as 3,500 Palestinian laborers have legal cases pending in Israeli courts, many centered on inadequate or unpaid wages and unfair treatment on the job. On top of that, he adds, nearly three-quarters of the Palestinian population is unemployed.

For the roomful of New York labor organizers, the Palestinian pair symbolizes a new fight over an old issue: economic ties between American labor and Israel. For years the AFL-CIO and other labor unions have sided with the U.S. government in its policies toward Israel, and have reportedly invested significant sums in Israeli bonds. Jerry Goodman, executive director of the National Committee for Labor Israel, told the Jewish weekly Forward in March that the American labor community holds nearly $5 billion in Israeli bonds.

That sizable figure has some labor rights activists fuming.

“It’s really a slap in the face,” says Jordan Flaherty of the Service Employees International Union. “Traditionally, the labor movement has represented struggling people all around the world. When American labor embraces Israel’s destructive and illegal policies, however, and fuels such behavior with billions in bond money, it’s really an act of betrayal–a betrayal of the principles on which the labor movement was built.”

Other city labor and political consultants aren’t so convinced. “Give me a break,” says longtime Democratic strategist Hank Sheinkopf. Labor unions buy Israeli bonds, he contends, because they’re sound investments. “Where do you draw the line? Would there be protest over investments in oil companies, or divestment in Arab countries that punish Christians, or where women are treated like trash? It’s selective enforcement. I don’t want to call it anti-Semitism–but if it walks like a dog and talks like a dog, it sure ain’t a chicken.”

As part of their own efforts to help the Palestinians, workers at the December rally passed around the hat to help their Palestinians guests raise cash for outreach programs and a new office. (Israeli F-16 fighter planes destroyed their old headquarters earlier this year, says Aruri.) By the end of the night, they collected $953.