Columbia University has told student protesters they must end their pro-Palestine encampment or face suspension, after negotiations broke down over their demand for divestment from Israel.

University officials gave students hours to leave Columbia’s West Lawn, where demonstrators have been living in tents for the last two weeks.

The students were told they would be allowed to leave the protest in “good standing” with Columbia if they vacated by 2pm local time (7pm BST) on Monday and signed a declaration that they would abide by the university’s rules until the end of term.

Those who did not leave and sign the agreement were told Columbia probably knew who they were, and that they would be banned from campus and blocked from graduating.

“We regret that we need to take these actions, but we must restore order to the campus so that all students can complete their work for the term, study for exams, and feel welcome in the community,” the notice said.

The demand came after almost two weeks of negotiation between the university and the protesters, who have called for Columbia to sell any investments linked to Israel, cancel a new “global centre” in Tel Aviv, and grant amnesty to demonstrators who have broken rules.

Baroness Shafik, the university’s president, issued a statement on Monday confirming that “the university will not divest from Israel” but that officials had offered to have the proposal explored by a committee.

She said Columbia had also offered to donate money to support humanitarian work in Gaza, and to publish a list of its direct investment holdings – meeting a student demand for financial transparency.

Lady Shafik said the protest encampment had created “an unwelcoming environment for many of our Jewish students and faculty,” and that “external actors” had contributed to a “hostile environment” around the campus, in the Upper West Side of New York.

She said the protest must be cleared in time for a graduation ceremony due to take place on the lawn on May 15.

“We also do not want to deprive thousands of students and their families and friends of a graduation celebration,” she said.

Some of the protesters have been accused of anti-Semitic chants and of harassing Jewish students by chanting about Zionism and calling for an end to the state of Israel.

Joe Biden, the US president, said on April 21 that there had been an ““alarming surge of anti-Semitism” after the protests.

On Monday, a group of 21 Democrats in the House of Representatives joined senior Republicans in calling for Columbia to bring the protest to an end.

The Democrats wrote of their “disappointment that, despite promises to do so, Columbia University has not yet disbanded the unauthorised and impermissible encampment of anti-Israel, anti-Jewish activists on campus”.

The student protesters at Columbia, who claim to be peaceful, have spawned a series of similar demonstrations across the US, Canada, Britain and France.

Their “encampment” on the lawn, which bears similarity to the Occupy protests that began in 2011, has been copied in more than two dozen states and at other elite universities including Harvard College.

Universities have responded to the protests in different ways, including by sending in police officers to forcibly remove and arrest students.

On Sunday “physical altercations broke out” at UCLA in Los Angeles, while almost 300 people were arrested at universities across the country at the weekend, including more than 70 at Arizona State University (ASU).

“While the university will continue to be an environment that embraces freedom of speech, ASU’s first priority is to create a safe and secure environment that supports teaching and learning,” the university said in a statement.