A BATTLE over Jewish assets said to be held by Swiss banks, which has flared on and off for half a century, is turning unprecedentedly nasty.
Years of relatively discreet diplomatic negotiations have lately given way to a very public trading of accusations between Swiss officials and Israeli and Jewish leaders, and the affair is even beginning to cast a cloud over formal Israeli Swiss relations.
A newly established Knesset committee yesterday began hearings on the issue of Jewish money in Swiss banks, deepening the official Israeli involvement in an affair that has hitherto been handled mainly by international Jewish organisations such as the World Jewish Congress (WJC) and the Jewish Agency.
At the heart of the battle is the assertion, by tens of thousands of families and heirs of Holocaust victims, that the contents of Swiss bank accounts opened by their murdered relatives before the second World War have never been passed on to them.
On several occasions in the past half century, the Swiss banks have carried out internal surveys and have found several hundred such accounts each time, subsequently distributing the assets to the rightful heirs.
But white the last such search, a few months ago, uncovered £20 million in 775 dormant accounts, Jewish groups are now alleging that over £4 billion in assets of Jews who perished in the Holocaust remains in the Swiss vaults.
Last year some Jewish activists suggested that the Swiss establish a $250 million compensation fund as a good faith gesture to elderly and impoverished Jews pending further investigation of the affair. But in an interview last week, outgoing President Jean Pascal Delamuraz, now the Swiss Economics Minister, said this demand "amounts to being blackmailed and held to ransom".
That comment, for which Mr Delamuraz has since apologised, caused outrage, in Jerusalem. The Israeli Foreign Ministry submitted a formal protest to the Swiss government.
The leaders of the WJC and the Jewish Agency now say they may organise sanctions against the Swiss banks, including boycotts, efforts to deprive the banks of their US operating licences and disinvestment drives.
Yesterday's Knesset session heard testimony from an American lawyer, Mr Ed Fagan, one of an 18 member legal team that represents 6,000 people who claim to have been denied access to Holocaust victims assets in the Swiss banks.
Mr Fagan told deputies that the Swiss refusal to part with these assets represented "the greatest bank robbery in the history of the world".
Reuter reports from Bethlehem:
The US Middle East envoy, Mr Dennis Ross, said yesterday that he was optimistic about closing a deal soon on an Israeli army handover to Palestinians of part of the West Bank town of Hebron.
"I remain hopeful we will see an agreement soon, but I can't predict when," Mr Ross said after meeting the Palestinian President, Mr Yasser Arafat.
After meeting Mr Ross, Mr Arafat planned to meet the Israeli negotiator, Mr Yitzhak Molho.
Officials on both sides said earlier they had agreed on increasing the number of international observers to be posted in Hebron after the Israeli redeployment.