Hundreds of Holocaust survivors, students and members of youth movements gathered Monday in front of the Knesset to protest against Israel's neglect of Holocaust survivors, many of whom are in a dire financial situation.

The rally came as Israel marked Holocaust Remembrance Day on Monday with memorials at the Knesset and the Yad Vashem Holocaust Martyrs' and Heroes' Remembrance Authority.

Following the protest at the Knesset, the demonstrators were also to head over to the Yad Vashem memorial.

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A representative of the treasury told a special Knesset hearing concerning survivors' financial situation on Sunday that some 180,000 Israeli Holocaust survivors do not receive any form of assistance from the state.

Following the hearing, Welfare Minister Isaac Herzog on Sunday announced the formation of a new team, to be headed by ministry director-general Nachum Itzkovitz, that will devise a proposal for a fundamental change in the way the government treats the Holocaust survivors in Israel.

According to Herzog, who requested the hearing, the proposal will include a detailed inspection of the survivors' needs as well as changes to existing legislation.

It will also review proposals for the increase of budgets with the assistance of the treasury. Once completed, the new proposal is expected to be submitted for the approval of Prime Minister Ehud Olmert, with the intention of implementing it in the following months.

The parties present at the hearing, including representatives from the Prime Minister's Office and the treasury, agreed to transfer the care of survivors from the latter to the Welfare Ministry. The initiative was already approved by Olmert.

"Israel has a moral and financial obligation to the survivors, and time in this particular case is of the essence," Herzog said. He added that the "dire condition of the survivors casts a shadow on Israeli society."

Noach Flug, president of the Center of Organizations of Holocaust Survivors, participated in the hearing. According to him, 80,000 of the survivors - one third of all survivors in Israel - are officially considered poor. They are mostly immigrants from the former Soviet Union, who are not entitled to compensation stipends from Germany.

MK Colette Avital, chair of the Knesset lobby for Holocaust survivors, told the parties present at the hearing that the treasury was thwarting dozens of bills aimed at helping survivors.

The Hebrew University law faculty asked Justice Minister Daniel Friedmann to have the state make available to survivors free legal services so that they can pursue their rights.

"We must never accept a reality in which even one of the Holocaust survivors in Israel is living without dignity," Acting President Dalia Itzik said in a speech Sunday.