The nationwide divestment campaign was one of the main messages delivered at the annual convention in Washington of the American Israel Public Affairs Committee (Aipac), which also called for tightening sanctions against Iran at the United Nations.

Speaking to some 6,000 delegates, Howard Kohr, Aipac executive director, singled out for special mention CalPERS – California’s state pension fund – which he said had more than $1bn (£517m, €758m) invested in foreign companies developing Iran’s energy sector.

“If the largest state pension funds in this country were to divest from companies with ties to Iran, it would have a crippling effect on Iran’s economy,” he said. Aipac would work with other Jewish organisations this year to support divestment efforts in 10 states.

“Stiff sanctions and targeted divestments – these will be the focus as we work to keep the pressure on Iran,” he said.

Records for 2006 show that CalPERS held over $468m in stock in Total, the French energy company, one of the foreign concerns that has invested most heavily in Iran. The California fund had over $330m of stock in Eni, the Italian company also active in Iran.

The concept and practice of “terror-free” investing is gathering momentum in the US, among public as well as private funds. Several states have already instructed their pension funds not to invest in countries on the State Department’s list of terror sponsors, namely Iran, Syria, Sudan, Cuba and North Korea.

Aipac said experts involved in the Sudan-Darfur divestment campaign, which is having a considerable public impact, were also aiding its effort.

Aipac’s pulling power was demonstrated by the line-up of speakers, led by Vice-President Dick Cheney, and Tzipi Livni, Israel’s foreign minister. Both drew strong applause for tough words aimed at Iran.

Talk of sanctions and divestment drew less enthusiastic applause. But several delegates said privately afterwards that sanctions were the only option, given the little appetite for launching a war with Iran after the debacle in Iraq.

Because of existing US sanctions, few US companies have business ties with Iran, except in the food sector and through foreign subsidiaries.