Kuwait defends charity after terror accusation

KUWAIT (Reuters) - U.S. ally Kuwait on Monday rejected Washington's accusation that a Kuwaiti charity was funding terrorist activities.

"The Revival of Islamic Heritage Society stands above suspicion," the official Kuwait News Agency reported the cabinet as saying after its weekly meeting.

The U.S. Department of Treasury said on Friday it has decided to freeze the assets of the Society, accusing it of financing terrorist activities.

The agency said the cabinet discussed diplomatic efforts aimed at containing these "false accusations that are not based on evidence", it said, adding that Kuwaiti charities including the Society played a prominent role in fighting "terrorist ideology and barring its destructive activities".

It said all Kuwaiti charities operate under state supervision.

Parliament Speaker Jassem al-Kharafi said on Sunday the U.S. decision could harm Washington's relations with its key Gulf Arab ally.

Kuwait, which was the launch pad for the 2003 U.S.-led invasion of Iraq, is home to thousands of U.S. soldiers.

Kuwaiti officials rarely criticize the United States, which lead a multi-national coalition to end the 1990-91 Iraqi occupation of the small nation.

(Writing by Inal Ersan; Editing by Matthew Jones)