Harvard Divinity School has agreed to return a $2.5 million gift from the president of the United Arab Emirates after 18 months of controversy over the donor's alleged connection to anti-Semitic and anti-American propaganda, Harvard officials said yesterday.

While not unprecedented, the university's return of a major donation is rare. It followed a campaign by some students and faculty members to protest the inflammatory activities of a think tank named for the UAE's unelected leader, Sheik Zayed bin Sultan Nahayan.

In a statement posted on its Web site yesterday, the divinity school said that "representatives of the UAE" recently "informed Harvard of the donor's desire to withdraw the gift for the Zayed Professorship, in advance of the University's scheduled consideration of the matter later this summer. Harvard has agreed to honor this request and to return the funds."

Zayed gave the money to Harvard in 2000 to endow a professorship of Islamic studies. But the post was not filled, and Harvard announced last year that it was on hold while university officials considered whether to return the money.

Although the UAE shut down the think tank last August, Zayed "has never publicly condemned or disassociated himself from the anti-Semitism emanating from his country, and until he does, he should not be associated with a prestigious university like Harvard," said Rachel Fish, who started the protests while studying at the divinity school in 2003.

Seven of the divinity school's 39 faculty members and hundreds of students and alumni had signed petitions urging Harvard to reject the gift. The petitions cited the activities of the Abu Dhabi-based Zayed International Center for Coordination and Follow-Up, which sponsored lectures and publications claiming that Zionists -- rather than Nazis -- were responsible for the Holocaust and that the U.S. military staged the Sept. 11, 2001, terrorist attacks.

Abdulla Saboosi, a spokesman at the United Arab Emirates' Embassy in Washington, said yesterday that Zayed had nothing to do with the center. "It's like Reagan National Airport. What does it have to do with the late President Reagan, God rest his soul?" he said.

Saboosi added that "the negotiations with Harvard were conducted in an atmosphere of cordiality and mutual respect, but since no decision was taken by the university, we regretfully thought we had no option but to retract the grant."

Wendy McDowell, a spokeswoman for the divinity school, said it will use existing funds to create two new faculty positions in Islamic studies.