The move came after Microsoft spent more than two months investigating a report in The Guardian that the Israeli Defense Force was using cloud service Azure "for the storage of data files of phone calls obtained through broad or mass surveillance of civilians in Gaza and the West Bank."

"We have found evidence that supports elements of The Guardian's reporting," Microsoft president Brad Smith said in a message to employees posted online.

"We do not provide technology to facilitate mass surveillance of civilians."

Microsoft reviewed the decision with the Israel Ministry of Defense along with steps the tech firm is taking to ensure compliance, according to Smith.

"This does not impact the important work that Microsoft continues to do to protect the cybersecurity of Israel and other countries in the Middle East," Smith said.