Two Lorde fans have raised thousands for a Gaza Strip charity instead of paying Israeli courts $12,000 in damages after they allegedly persuaded Lorde to cancel a concert.

Justine Sachs and Nadia Abu-Shanab woke up on Friday "to find Israeli courts have ordered us to pay more than $12,000 USD in damages to three Israeli teenagers".

It followed controversy when the two women wrote an open letter to Lorde last year encouraging the singer to boycott a concert at Tel Aviv, in Israel.

"We will not be paying the court ordered amount."

"Instead, we would like to use the publicity surrounding Israel's stunt to return the attention and support back to Palestine and those paying the heaviest price for Israel's actions," the duo wrote on The Spinoff.

In just two days the Givealittle campaign raised more than $13,000 from more than 300 donors.

"They financially support the work of incredible grassroots organisations such as The Gaza Community Mental Health Programme among others.

"The foundation will send donations in their entirety to organisations which are providing vital mental health support to the traumatised families of the Gaza Strip," the Givealittle reads.

The Israeli lawsuit against the two New Zealanders was filed under a law that allows civil lawsuits against anyone who calls for a boycott against Israel. Thursday's ruling is believed to be the first time the 2011 law has been applied.

Sachs and Abu-Shanab appealed to the singer in an open letter to "join the artistic boycott of Israel".

Lorde acknowledged the letter and cancelled her show days later.

Three Israeli ticket holders filed the suit, claiming the cancellation had caused "emotional distress".

Their lawyer, Nitsana Darshan-Leitner, says the decision sends a message that boycotting Israel carries a price.

Shortly after the cancellation, Israel's Culture Minister called on Lorde to reverse her decision.

Miri Regev dubbed the cancellation "ridiculous" and urged her to reconsider.