Global security firm G4S is being investigated by a UK government-funded watchdog over its behaviour in the West Bank.
The company supplies screening and security equipment to prisons, detention centres and military checkpoints in the occupied Palestinian territories, under a deal with the Israeli government.
The National Contact Point (NCP), part of the Department for Business, said there were "issues for further examination" regarding the company's actions in the West Bank.
The investigation follows a complaint from the Lawyers for Palestinian Human Rights (LPHR), a charity that has campaigned against G4S's work in the region, and will attempt to discover whether the company has breached Palestinians human rights.
G4S, which employs 6,000 people in Israel, said it would support the investigation but denied the accusations. The company said in a statement that it "takes very seriously our obligations to ensure that our activities do not contribute to human rights abuse. We have provided evidence which clearly demonstrates that the company is acting appropriately in the context of international laws and voluntary human rights guidelines including those set out by the OECD."
The security giant has said it will not renew its contracts to work in the West Bank after they expire in 2015 and said it only maintains and installs security equipment in the occupied territories, rather than managing any facilities.
However, rights groups have criticised the company's contracts with the Israeli government for years and there are likely to be more protests at its annual general meeting on Thursday.