The frozen food specialist’s advert, which launched online last week, is aimed at raising awareness of the issues surrounding palm oil.
The animated short film features a young girl and an endangered orangutan called Rang-tan.
It tells the story of rainforest destruction caused by palm oil production – and its impact on the orangutan population.
However, the advert was banned from television by advertising authorities, sparking a backlash from consumers.
The petition on change.org has reached 640,000 – with a target of 1 million signatures.
Iceland managing director Richard Walker said: “Throughout 2018 we have led the retail industry to take action in areas such as the use of palm oil and plastics, and this year we were keen to do something different with our much anticipated Christmas advert.
“The culmination of our palm oil removal project is offering our customers the choice of a Christmas without palm oil, and we wanted to reflect this in our advertising.
“While our advert sadly never made it to TV screens, we are hopeful that consumers will take to social media to view the film, which raises awareness of an important global issue.”