A person involved said the 60sqm flag was handmade and had been set up on the cliff side on the other side of Lake Dunstan from State Highway 6, about 6km from the Cromwell bridge.
The person, who asked to remain anonymous for fear of retribution, said they hoped it would inspire people to take action.
"We just really want to keep it in the public eye that this is going on."
The only way for people in New Zealand to take action was to pressure the government to take action on the international stage, they said.
"Traditionally, we’ve had quite a proud history of sort of proud international and independent foreign policy. We had nuclear free and all sorts of things in the past. However, we’ve sort of really lost that voice and particularly under this government," they said.
The Cromwell Gorge was chosen because of the amount of traffic through the area each day.
As well as the large flag on the cliff face, smaller flags with signs reading "Free Palestine", to help people connect the flag with the issue, were placed on the roadside, but were removed by contractors at the request of NZ Transport Agency Waka Kotahi, which was concerned about driver distraction.
A spokesperson said it had no concerns about the flag as it was on land away from the highway.
The person involved in the flag display said it was planned to remove the cliff-side flag late yesterday.
"It’s just a one-day pop-up show."
There were no further plans to display the flag in Central Otago, but the person would continue their work elsewhere.
