The campus divestment campaign was initiated in February 2001 by Students for Justice in Palestine (SJP), a student group at the University of California, Berkeley, in conjunction with the San Francisco chapter of the American-Arab Anti-Discrimination Committee. A year later, following the PSM's first conference, which was held in Berkeley, the movement began to spread to other universities, including the University of Michigan, Yale, Princeton, Harvard and the Massachusetts Institute of Technology.

Building on the Israeli incursion into Palestinian towns in spring 2002 (in response to a wave of suicide bombings), the movement was able to energize pro-Palestinian advocates on campuses nationwide with its call to divest.  The PSM has held several national conferences and it has managed to unify pro-Palestinian campus activists behind the push for divestment.

The campaign has failed, however, to convince targeted academic institutions to pull investments from Israel or from U.S. companies that do business with Israel. By fall 2003, disagreements within the movement and the failure to register any real accomplishments had impeded its growth. Looking to appeal to larger audiences and avoid creating antagonism, some organizers argued for a more moderate tone; others sought to recast the movement as part of a global struggle.  Events in the Middle East, such as Israel's disengagement from Gaza and the victory of the terrorist organization Hamas in the Palestinian election (the latter was hailed by some divestment proponents), will probably further diminish the campaign's appeal.

Since the beginning of 2005, pro-divestment activists managed to pass favorable resolutions at student and professional bodies in small colleges associated with the Michigan and Wisconsin systems, but these localized successes lacked broad support within the institutions and were ultimately rejected by universities' Board of Regents.

The Fifth Annual Conference of the Palestine Solidarity Movement took place on February 17-19, 2006 at Georgetown University. While local divestment debates and petitions continue, the PSM has not hosted a national conference to train new activists since 2006. 

Several university presidents and administrators have spoken out against divestment and deplored the animosity that these campaigns have often brought to campus (while upholding the supporters' right to free speech). Here are a few examples:

• University of Michigan Regent Larry Deitch said of divestment: "It's just not a good idea. Many of us feel that divestment should only be used in the most extreme and egregious examples, and even then there's a question of whether it's a good thing for universities to do." (Michigan Daily, March 17, 2006.)
   
• Georgetown University President John DeGioia stated:  "I do not support divestment from Israel."  (Meeting with faculty, January 2006).
   
• University of Pennsylvania president, Judith Rodin, published an article explaining "why targeting Israel for divestment and boycotts is wrong." (The Daily Pennsylvania, October 18, 2002).
   
• Rutgers University President Richard McCormick: "The governor [of New Jersey] and I agreed that we find the views of New Jersey Solidarity to be reprehensible. But we also agreed that the best way to counter deplorable arguments is more discussion…" (Statement released to the press, July 17, 2003).
   
• Columbia University President Lee Bollinger: "I want to state clearly that I will not lend any support to this proposal. The petition alleges human rights abuses and compares Israel to South Africa at the time of apartheid, an analogy I believe is both grotesque and offensive." (Statement posted to the University's Web site, November 2002).
   
• Harvard University President Lawrence H. Summers rejected the divestment proposal, saying, "The suggestion that [Israel's] defense against terrorist attacks is inherently immoral seems to me to be an unsupportable one" (Harvard Crimson, May 15, 2002). In a speech arguing that divestment efforts helped create anti-Jewish environments, he said: "Serious and thoughtful people are advocating and taking actions that are anti-Semitic in their effect if not their intent" (September 17, 2002).