Protesters have scaled the roof of an aerospace factory and daubed the building in red paint.
The Palestine Action protesters occupied the premises of APPH in Runcorn, Cheshire, at about 04:30 BST.
They claim the factory produces landing gear for Elbit drones which have been used in the conflict between "Israel" and Hamas in Gaza.
APPH's website says it manufactures hydraulic equipment for military helicopters and fighter jets.
Protesters said they had "destroyed property including floodlights, ventilators, windows and cameras" and had "sprayed blood-red paint across premises".
Cheshire Police officers can be seen outside the factory and the force has been contacted for comment.
The fighting in the Middle East 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.
A ceasefire was agreed on 21 May, bringing to an end 11 days of fighting in which more than 250 people were killed.
Palestine Action said it would be "targeting all firms which have dirtied their hands by partaking in Elbit's business of bloodshed".
A protest by the group in Leicester in May ended after six days.
Source: This news first appeared in The BBC, along with the cover photo.