A small Palestinian community is taking legal action against two Montreal companies in an attempt to stop them from constructing residential buildings in the West Bank.

The village of Bil'in, home to 1,700 people, is using Canada's Crimes Against Humanity and War Crimes Act in its lawsuit against Green Mount International and Green Park International.

The lawsuit, filed last July, seeks $2 million in punitive damages from the companies, alleging that they are building Israeli homes on Palestinian territory.

Three of the villagers who live in Bil'in are in Montreal for the court proceedings, which began in Quebec Superior Court Monday morning.

"The allegation is that they are breaching Canadian law that touches the conduct of Canadians wherever that conduct occurs," said Mark Arnold, a lawyer for the Palestinian town.

"My clients, because they cannot bring their claims to Israel, have chosen to come to the Canadian court where the companies are registered and domiciled."

Dozens of protesters carrying placards and waving Palestinian flags gathered outside of the Montreal courthouse to show their support for the visiting Palestinians.

"We want to come here to attend and have our rights back, which is taken from us by forces," said Mohammed Khatib, a member of the Palestinian Committee against Wall & Settlements. "Building inside the settlement is a war crime."

Ronald Levy, a lawyer representing the two companies, said Quebec courts are the wrong forum to hear the suit, and the case should be thrown out.

The hearings are expected to last until Wednesday.