"It's a clear attempt to deny us our freedom of speech," Fathi El-Abed, chairman of the Danish Palestinian Friendship Association, told AFP after bus operator Movia last week pulled the campaign.
"There is nothing whatsoever about this campaign that is harmful, discriminatory or hateful in any way," he added.
The advertisements on 35 buses in the Copenhagen area pictured two women beside the quote: "Our conscience is clean! We neither buy products from the Israeli settlements nor invest in the settlement industry."
But they were dropped by Movia within just four days after the company "received a significant number of inquiries regarding the Danish Palestinian Friendship Association's campaign against Israeli settlements."
The company declined to comment when contacted by AFP but said in a statement that the campaign was "unnecessarily offensive."
Al-Abed said his group would respond by expanding a national advertising campaign on the same subject.
"Nobody can understand why they [the bus company] decided to do this," he said.
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Feminists last year unsuccessfully petitioned Movia to drop a long-running advertising campaign by a plastic surgery clinic that showed a naked woman's breasts next to the tagline "New breasts", and the city's buses regularly feature political advertisements.
"Our support has grown because of all this attention because people are outraged, even those who've never had anything to do with the Palestinian cause," Al-Abed said.
MP Christian Juhl of the Red-Green Alliance (Enhedslisten) called Movia's decision "embarrassing":