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MK Mohammed Barakeh (Hadash-Ta'al) yesterday proposed an amendment to the law governing compensation for terror victims that would entitle Arab Israeli families harmed by Jewish terror to compensation from the state.

Barakeh's amendment would recognize as victims of terror anyone injured from "hostile activities by a terrorist organization," and not just those hurt by "organizations hostile to Israel."

This follows the decision Monday of an interministerial committee headed by a Defense Ministry official that the victims of the August 4 terrorist attack in Shfaram and their families will receive a one-time compensation from the state, but will not be recognized as terror victims.

Four Israeli Arabs were killed in the Shfaram attack, when a Jew who had gone AWOL from the Israel Defense Forces opened fire in a bus.

The attack was seen as an attempt to thwart the withdrawal from the Gaza Strip and part of the northern West Bank.

According to Barakeh's proposed amendment, which was signed by three MKs from the Arab Hadash-Ta'al faction, while Arab citizens have suffered from acts of Jewish terror coming from nationalist and racist motives, they have not been entitled to compensation from the state.

However, Israelis who are hurt in terror attacks directed against the state do receive compensation.

The amendment would also apply to Palestinians residing within Israel's territory. The bill emphasizes that an identical bill was submitted to the Knesset in 1994 but was not approved.

MK Yuli Tamir (Labor) has also prepared an amendment for the law on compensation for terror victims. Hers would define victims of terror as any person who is hurt as a result of actions aimed at foiling government policy.

People whose property is damaged because they belong to a particular national, ethnic or religious group would also be defined as terror victims.

MK Jamal Zahalka (Balad) called on Prime Minister Ariel Sharon to work for a change in the law, as immediately after the Shfaram attack he labeled it as a dangerous terrorist attack and ordered that the victims be compensated.

The inter-ministerial committee had a mandate to consider cases such as the August 17 terrorist attack in Shiloh, in which an Israeli citizen fatally shot four Palestinians.

In the past, the committee has dealt with compensation claims from relatives of people who were killed and wounded during the October 2000 riots, in which 13 Israeli Arabs were killed by the security forces.

At the time, Arab Knesset members tried to change the terror victims law to cover people who have been attacked by someone not recognized as a member of an enemy force, but their efforts failed.

The families of the Shfaram victims, where soldier Eden Natan Zada shot dead four civilians, were angered by the decision not to recognize them as terror victims and said that financial compensation was not their main concern.

"Even if they paid me a million dollars, nothing would bring my brother back," said Nazia Hayek, whose brother, Nader Hayek, was killed in the attack.