Around 10 people from the London Palestine Action group have been protesting at UAV Engines in Lynn Lane, Shenstone near Lichfield since 5am.
A banner has been hung from the roof saying :"UK: stop arming Israel."
The road has been shut by police while they deal with the incident.
The group has posted a series of messages on Twitter, saying they have enough supplies to 'last a week'.
Police had entered the building but protesters were 'staying put as long as it takes'.
Another message said: "UK govt complicit in #Israel war crimes by allowing #UAVengines to supply the engines for Israeli drones."
The Israeli-owned British company has been drawn into the political controversy over arms sales to Israel in recent years.
The firm is one of the world's leading manufacturers of engines for drones - unmanned aerial vehicles that are used by the military across the world.
The company, known as UEL, is owned by the Israel drone specialists Silver Arrow, a subsidiary of the Israeli defence contractor Elbit Systems.
It is claimed some of its equipment is being used in the Gaza conflict.
This afternoon, Chief Inspector Jane Hewett, from Staffordshire Police, said: "Officers are continuing to police a business premises on Lynn Lane in Shenstone, Lichfield.
"We have a number of officers in the area who are maintaining order and keeping the peace as well as ensuring the safety of protestors, emergency teams and the wider public.
"We are providing fair and balanced policing at the site and have a number of specialists in attendance including police negotiators who are working to resolve the incident safely.
"This appears to be an organised and planned protest and we are investigating the circumstances of how the protestors came to be on the roof.
"Colleagues from Staffordshire Fire and Rescue are providing support with an aerial platform and we have paramedics on standby from West Midlands Ambulance Service."
Staffordshire Police spokeswoman Faye Casey said: "Police were called to a business premise on Lynn Lane, Shenstone, just after 5.20am this morning following a report of a public protest on top of a building.
"Officers are in attendance to ensure the protest remains peaceful and safe and we are working closely with the business and the protestors. As a result of this activity we have cordoned off Lynn Lane.
"The safety of our officers, the business staff and the protestors is our priority."