Joining many other universities in the UK and around the world, they decided to take action after the university’s administration failed to meet their demands.
On Tuesday morning, students first released a 116-page report titled Assets in Apartheid focusing on the university’s investments in "various egregious activities," including supporting the Israeli military and arms manufacture.
Later, a group of students led by the LSE Palestine Society occupied the Marshall Building, a part of the university’s campus, and set up an encampment inside it.
LSE security personnel later started checking IDs outside the entrance of the building while the protesting students placed Palestinian flags and banners.
In an interview with Anadolu, Ethan Chua, an LSE student and a member of the LSE Palestine Society, said they are taking action because they are saying "no to business as usual."
"LSE has an endowment of around £485 million ($610 million), of which nearly 80 million pounds are invested in crimes against the Palestinian people, in fossil fuels, in arms and weapons and financiers of these activities," he said.
He noted that they have occupied the Marshall Building because they say "no to business as usual, at a university that profits off of the deaths of Palestinians in Gaza."
Chua vowed to remain at the encampment until their demands for divestment from "egregious activities" are met.
'We will not be silenced'
Saying that they have been campaigning since October for divestment and for the university to issue a statement calling for a cease-fire in Gaza, Chua noted that their demands and calls have largely been met by the "machinery of bureaucracy with silence."
"We've only met with the university administration once in January. And there the investment advisor of the university, Caroline Butler, said the university's environmental and social governance policy was about risk and not ethics, a moral abdication of the university's responsibility," he added.
Since then, the university has refused to meet officially with the Palestine Society, he said.
"So we are out here tonight showing our power, showing the university and the world that we will not be silenced and ultimately returning the gaze of the world media to Gaza, to Rafah, and to the plight of the Palestinian people," he said.
Citing their report, Chua pointed out that their research have found that LSE invests in weapons companies like BAE Systems, Boeing, Raytheon, Lockheed Martin, naming these companies that "provides munitions and arms and bombs for the Israeli military."
At least 35,180 Palestinians, most of them women and children, have been killed amid Israel's war on the besieged Gaza Strip, while over 79,000 others have been injured, according to Palestinian health authorities.
A cross-border attack by the Palestinian group Hamas on Israel that precipitated the current war killed about 1,200 people.
More than seven months into the conflict, vast swathes of Gaza lay in ruins amid a crippling blockade of food, clean water and medicine.
Israel is accused of genocide at the International Court of Justice. An interim ruling in January said it is "plausible" that Tel Aviv is committing genocide in Gaza, ordering it to stop such acts and take measures to guarantee that humanitarian assistance is provided to civilians in the enclave.