OSLO (Reuters) -Lawmakers were on Wednesday debating whether Norway's $1.9 trillion sovereign wealth fund, the world's largest, should divest from all companies with activities in the occupied Palestinian territories.

A formal vote was expected around 3 p.m. Parliament was expected to reject a wholesale boycott.

The minority Labour government has for months been resisting pressure from pro-Palestinian campaigners to instruct the fund to divest from all firms with ties to the West Bank and the Gaza Strip.

"We have an established ethical regime for the fund," Finance Minister Jens Stoltenberg told the chamber in a debate on several aspects of the way the fund is run.

"We divest from the companies that contribute to Israel's breach of international law, but we do not divest from all companies that are present on the ground."

Lawmaker Ingrid Fiskaa from the small Socialist Left opposition party told the chamber: "Without Norwegian oil fund money, it would be more difficult for Israeli authorities to demolish the homes of Palestinian families."

The United Nations' special rapporteur on human rights in the Palestinian territories, Francesca Albanese, wrote to Stoltenberg to alert him to what she called the "structural entanglement of Israeli corporations ... in the machinery of the occupation both in the West Bank, including east Jerusalem, and the Gaza Strip, and the violence that sustains it".

"International corporations benefiting from (the Norwegian fund's) investments are critical components of the infrastructure sustaining the economy of the occupation," she wrote, in a letter dated May 20.

Stoltenberg replied that the government was "confident that the investments do not violate Norway's obligations under international law".

He noted that the fund follows ethical guidelines set by parliament, and that compliance is monitored by a separate body.

That watchdog has over the past year recommended divestments from Israeli petrol station chain Paz  and telecoms company Bezeq  and is looking at more potential divestments in Israel.