Google says......
Is supporting a terrorist organization illegal?
The Antiterrorism Act also created 18 U.S.C. ยง 2339B, which makes it unlawful, within the United States, or for any person who is subject to the jurisdiction of the United States anywhere, to knowingly provide material support to a foreign terrorist organization that has been designated by the Secretary of State.
Microsoft has every right to terminate business with terrorists.
I guess that the question is whether MS can prove that these people are terrorists. Perhaps the fakestinians ought not protest too much about this. Now that they’re identified shouldnt be too difficult to see what’s going on under the hood here.