The state-owned Company for Locating and Retrieving Assets of People Who Were Killed in the Holocaust is attempting to halt the privatization of Bank Leumi until an agreement is reached over the transfer of accounts of Holocaust victims.

This weekend, company chairman Avraham Roet appealed to Minister Rafi Eitan, who was recently appointed by Prime Minister Ehud Olmert to advance the privatization of the state-owned bank, to stop the process until the "rights of the victims' heirs and of the survivors can be guaranteed." Bank officials said the bank is willing to reach an agreement on the issue and that it is Roet himself who is preventing one from being reached.

The December 2004 Report of the Parliamentary Committee of Inquiry on the Location and Restitution of Assets of Holocaust Victims in Israel, chaired by Collette Avital, concluded that Bank Leumi owes between NIS 35 million and NIS 307 million, depending on how the assets' real value is calculated, to the heirs of account-holders who perished in the Holocaust. The committee found about 2,500 Leumi accounts that were judged "very likely" to have belonged to Jews who died in the Holocaust.

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Most of the monies were transferred to the Custodian General or repaid to the customers' heirs after World War II, but in most cases the amounts paid were insufficient. In the wake of the report, Leumi set aside NIS 35 million that if offered to distribute to Holocaust survivors in return for ending the bank's role in the affair.

Haaretz has learned that Bank Leumi Chairman Eitan Raff and the bank's counsel met with Rafi Eitan and reiterated the offer, which they say Eitan welcomed.

The law passed in the wake of the Knesset Committee report stipulated the establishment of a state-owned company that would locate the assets of Holocaust victims and transfer them to the individuals heirs, when these could be found, or to survivors' organizations and commemorative institutions. Roet claims the company has been negotiating with Leumi since the company's founding in October 2006, to no avail.

"Unfortunately, the bank has shown no consideration for the moral side of the issue," Roet said. Associates of Eitan said Saturday that they failed to understand Roet's opposition to the bank's offer.

While the offer itself may be generous, the bank's condition for its acceptance that the payment to survivor organizations end all claims by the heirs of account-holders is hard to swallow in light of the calculations according to which Leumi owes more than NIS 300 million to their heirs over these accounts.