From JTA, February 4, 1952:
Maj. Gen. G.L. Nold, Deputy Chief of Army Engineers, told the Senate Preparedness Subcommittee that the Army considers it undesirable to hire American Jews to work on bases in North Africa because Jewish construction workers might offend the Arabs.For this reason, some 20,000 unemployed construction men in New York were by-passed for such jobs in Morocco and elsewhere. The New York State Employment Service said it would not screen out Jews, while officials in Minnesota cooperated with the Army’s request, Gen. Nold said.
A month later, the Secretary of the Army clarified matters - but they ended up being more muddied:
Secretary of Army Frank Pace has written Sen. Herbert H. Lehman that recent statements of Maj. Gen, G. L. Nold concerning the desirability of eliminating Jews from among candidates for employment on overseas projects “were broader than the facts justified.”The Secretary of Army wrote that contractors have not discriminated against Jews who seek work on Saudi Arabia projects, but that such Jews are automatically eliminated because the Saudi Arabian Government will not grant them the required visas. He added that it was possible that Gen. Nold, at the time of his testimony, was of the opinion that the same or similar difficulties applied to all Arab countries. “Our investigation, however, discloses that is not the case,” Pace emphasized.Secretary Pace also made known that the Army is still investigating reports of anti-Jewish discrimination on U.S. construction projects in Iceland, Greenland and Newfoundland.
Jewish groups said that this was hardly better:
Major Jewish organizations today announced that they considered unsatisfactory the explanation of Secretary of the Army Frank R. Pace, regarding discrimination against Jewish workers by Army contractors in recruiting labor for military construction projects in Saudi Arabia.“We note, however, that contractors are, in fact, discriminating against workers of Jewish faith in recruiting for military construction in Saudi Arabia. Although the contractors assert that they are doing so contrary to their own wishes, and solely because Jews are refused visas for entry into Saudi Arabia by officials of that country, the net result is discrimination on government contracts in clear violation of Executive Order 10308.”“It is our belief,” the letter stated, “that the government of the United States, if it is to remain true to its basic democratic principles, must advise the government of Saudi-Arabia that it will not accept the discrimination against U.S. citizens practiced by that country in granting visas, and will insist that Saudi-Arabia admit those American citizens hired by our country to work on military construction there.”
The Arab boycott was of Jews, not Zionists. It tried to get people who didn't hate Jews to change their behavior to adhere to the boycott for economic reasons.
Sounds exactly like BDS.