The plaintiffs, represented by the law firm Martin McMahon and Associates, allege that the defendants are directly responsible for violence and for the expansion of settlements.
The lawsuit, filed in a Washington, DC, federal court on Monday, alleges a wide range of crimes under US and international law, including genocide, war crimes and crimes against humanity, conspiracy, money laundering, racketeering, perjury and pillage.
It alleges that charitable donations are sent to the Israeli army, a violation of US laws against funding a foreign military.
Last December, some of the same plaintiffs using the same law firm sued the US Treasury for allowing billions of dollars of tax-exempt donations to flow to Israeli settlements.
This lawsuit targets those who are supplying the money.
Several are powerful billionaires who the lawsuit contends have defrauded the US tax authorities by funnelling huge sums of money meant for illegal purposes through tax-exempt organizations.
According to the lawsuit, approximately $1 billion is sent through these organizations each year, with $104 million going to the Israeli army in 2014.