Bank Leumi will transfer NIS 130 million to Holocaust survivors and heirs of victims, under a settlement approved Sunday by the bank and the Company for Location and Restitution of Holocaust Victims' Assets.

The agreement marks the end of the state-established company's NIS 300 million lawsuit against the bank from June 2009, for funds deposited in 3,577 accounts before World War II by Jews who later died in the Holocaust. The parties turned to arbitration early last year, through the mediation of MK Zeev Bielski (Kadima ).

In 2007, Leumi transferred NIS 20 million (worth NIS 25.8 million today ) to the company. The settlement approved Sunday was reached on the recommendation of the arbitrators: retired Supreme Court Justice Tova Strasberg-Cohen, retired Judge (emeritus ) Ruth Eliaz and Prof. Omri Yadlin.

Noach Flug, head of the Center of Organizations of Holocaust Survivors in Israel, welcomed the settlement. "It's better that a comprise was reached today, rather than a better outcome in a legal process many years from now," he said.

In a statement issued yesterday, Leumi said: "This agreement constitutes the final and complete end of all claims by the Company for Location and Restitution of Holocaust Victims' Assets against the Bank Leumi group. Signing the agreement does not constitute any kind of recognition on the part of the bank of any the company's claims or demands. Nevertheless, out of a desire to enable assistance to Holocaust survivors in their lifetimes, the bank reached an agreement with the company, according to which, as stated in the agreement, the monies are intended for aid to Holocaust survivors as well as monetary payments to eligible heirs of victims of the Holocaust."

After the lawsuit was filed, survivors protested what they termed the bank's foot-dragging, in one case demonstrating outside bank headquarters in Tel Aviv during a July 2009 board meeting.

The suit was filed in accordance with the provision of the 2007 Law for Holocaust Assets. That law established the Company for Location and Restitution of Holocaust Victims' Assets and specified the transfer to the company of assets belonging to individuals who died in the Holocaust held by banks or other organizations in Israel, plus interest and currency revaluations as determined by a committee created for this purpose. The company, for its part, is required to locate beneficiaries and return the lost assets to them.

After a state inquiry commission determined that Leumi was in possession of large amounts of money belonging to Holocaust victims, the company asked the bank for the assets. The bank denied that it had any money belonging to Holocaust victims.

European Jews deposited funds into the Anglo-Palestine Bank, the precursor of Leumi and the largest and most important Jewish-Zionist bank of the era, beginning in the early 1930s, in order to support the Zionist enterprise and also in hopes of guaranteeing their own future, in wake of growing anti-Semitism in Europe.

It later turned out that many of the account holders died in the Holocaust, their assets going unclaimed.

In its suit, the company claimed Leumi has consistently refused to cooperate with bodies requesting information about deposits that belonged to European Jews and has refrained to disclose information about unclaimed funds in its possession.