While a large majority (385) MPs voted to proscribe the group, 26 voted against the move.
The amendment to the Terrorism Act 2000 to include Palestine Action and two other groups, Maniacs Murder Cult and Russia Imperial Movement, will go to the House of Lords on Thursday and become law at midnight on 9 July if it passes through successfully.
It means it will become a criminal offence – punishable by up to 14 years in prison – to be a member of the three groups or to support them, if any legal challenges by the groups prove to be unsuccessful.
Several Labour MPs made impassioned speeches about why they think Palestine Action should not be a terrorist organisation, and raised concerns it was grouped in with the other two.
They argued that proscribing the group “threatens basic freedoms and sets a dangerous precedent for political dissent”.
Several Labour MPs said they agreed the group had caused criminal damage but did not think they should be deemed terrorists.
Security minister Dan Jarvis told MPs protesters expressing support for Palestine “have always been able to, and can continue to do so”.
He said: “Palestine Action is not a legitimate protest group.
“People engaged in lawful protest don’t need weapons. People engaged in lawful protest do not throw smoke bombs and fire pyrotechnics around innocent members of the public.
“And people engaged in lawful protest do not cause millions of pounds of damage to national security infrastructure, including submarines and defence equipment for NATO.”
Palestine Action is seeking a legal challenge against the government’s bid to proscribe it, with a hearing expected on Friday to decide whether its proscription can be temporarily blocked, pending further proceedings to decide whether a legal challenge can be brought.
Hours before the debate, two members of Palestine Action were charged with criminal damage after blocking the entrance to defence firm Elbit System’s Bristol facility on Tuesday.
The group allege Elbit Systems UK is involved in the manufacture and supply of weapons to the Israeli military – which the company strongly denies.
Members of Palestine Action are also accused of entering RAF Brize Norton in Oxfordshire and vandalising two aircraft with red paint.
The group said two of its activists “broke into the largest air force base in Britain and used electric scooters to swiftly manoeuvre towards the planes” before spraying red paint into the turbine engines of two Airbus Voyagers, with further damage made using crowbars.
Five people have been arrested over the incident, including two men aged 22 and 24 on suspicion of a terror offence.
A security review was launched across the “whole defence estate” following the breach
