Airbnb is rescinding its plan to bar listings in Israeli settlements in the West Bank.
The company said it will also apply the same approach in other disputed territories in the world, including South Ossetia and Abkhazia.
"We have always sought to bring people together and will continue to work with our community to achieve this goal," Airbnb said.
Supporters of Airbnb's initial plan expressed disappointment.
"Donating profits from unlawful settlement listings, as they've promised to do, does nothing to remedy the human suffering they have acknowledged that their activities cause," said the advocacy group Human Rights Watch in a statement. "By continuing to do business in settlements, they remain complicit in the abuses settlements trigger."
But others celebrated the news.
"I believe other companies considering boycotts are going to take real note of the mistake Airbnb made and refuse to act against Israel and the Jewish community," said Nitsana Darshan-Leitner, the director of the Shurat HaDin Israel Law Center, a Tel Aviv-based Israeli advocacy group.
San Francisco-based Airbnb was sued in U.S. federal court by 12 dual U.S.-Israeli citizens who own homes in the settlements. Airbnb's reversal settles that case.
"As a provider of a service to the public, Airbnb is not permitted to refuse to provide services to selected religious groups to engineer who it thinks should be allowed to live where," said Robert Tolchin, an attorney for the plaintiffs. "We are gratified that the legal process has worked."
The plan didn't affect about 20,000 other listings throughout Israel, including listings in other disputed areas like east Jerusalem and the Golan Heights.
Darshan-Leitner said she thinks Airbnb "intentionally sought out the busiest news day of the Israeli calendar in order to bury the story of their embarrassing walk back."
Airbnb didn't comment beyond its blog post announcing the change.
Even after its announcement in November, Airbnb had slow-walked the decision. Listings in Israeli settlements continued to be available on its site, and visitors could book them well into the future. In a January blog post, the company said it was working with experts to identify precise boundaries "and ensure that our technological solutions attend to the relevant details."
Political and legal pressure kept mounting. Amnesty International was among those pressuring the company to go even further and ban listings in east Jerusalem. At the same time, Texas, Florida and Illinois said they would prohibit any state business with Airbnb because of its stance on the listings in the West Bank settlements.
Airbnb's rivals, Booking.com, Expedia and TripAdvisor, continued to offer properties in the settlements. TripAdvisor said it makes clear when properties are within Israeli settlements, and it uses the term "Palestinian Territories" to refer to the West Bank and other areas.
Israel captured the West Bank and east Jerusalem in the 1967 Middle East war. Today over 400,000 Israeli settlers live in the West Bank, in addition to some 200,000 Israelis in east Jerusalem. The Palestinians claim both areas as parts of a future state.