Activists have staged a protest on the roof of a factory involved in building combat drones.
A group called Palestine Action says it has occupied part of Israeli-owned Elbit Systems subsidiary UAV Tactical Systems in Leicester.
The facility builds unmanned aerial vehicles that the protesters allege have been used in the conflict between Israel and Hamas in Gaza.
They said they chained the gates shut and disrupted production.
Elbit has been approached for comment.
At 19:30 BST on Wednesday, a spokesperson for the protesters said there were more than 100 people outside the gate and the group on the roof was hoping to spend the night there, more than 13 hours after they first climbed up.
Police confirmed they were still negotiating with those on the roof.
Escalating tensions in Gaza, Israel and the West Bank have recently turned into violence, with exchanges of rockets and air strikes resulting in more than 200 reported deaths.
The fighting began on 10 May after weeks of rising tensions.
Palestinians say they are suffering because of Israeli actions and restrictions, including the threatened eviction of some families in East Jerusalem. Israel says it is only acting to protect itself from Palestinian violence.
It culminated in clashes at al-Aqsa, a holy site revered by both Muslims and Jews. After warning Israel to withdraw, Hamas began firing rockets, triggering retaliatory air strikes.
Red paint was sprayed on at least one of the walls of the factory in Meridian Business Park.
An aerial ladder was deployed by the fire service but crews have since left the scene.
In a statement, Palestine Action said: "Today's action shows that it is entirely within our power to stop the production of brutal machinery which is fuelling war crimes in Palestine.
"The past week has shown the relentless death and destruction that Israeli forces can and will inflict with UK-made munitions and military technology."
Leicestershire Police confirmed officers were called at 05:32 BST.
A spokesman said: "Police remain at the scene and are attempting to engage with those on the roof."
By the afternoon, the protesters were still in place and police said officers continued "facilitating a peaceful protest on the ground outside".
Fire crews attended the scene and used an aerial ladder but later withdrew.
'Right to protest'
A spokesman for the Leicestershire Fire Brigades Union said: "The Fire Brigades Union were made aware that the protesters were representing the Palestinian solidarity group Palestine Action.
"Union officials immediately reminded senior managers that as firefighters, we are, and remain, a proud humanitarian service and our role does not involve law enforcement.
"Once the safety of those involved had been confirmed, Fire Brigades Union members withdrew from the incident."
Leicestershire brigade chair Graham Vaux added: "The Fire Brigades Union stand in support of Palestinian solidarity and the right to protest."