UBS denies funding militants' attacks in Israel

NEW YORK (Reuters) - UBS AG on Wednesday rejected allegations by American victims of bombings and rocket attacks in Israel that the Swiss bank helped fund the militants through dealings with Iran.

The lawsuit seeks damages for more than 50 plaintiffs, including injured U.S. citizens or relatives of those killed in bombings in Israel between 1997 and 2006. It said the attacks were carried out by militant groups Hezbollah, Hamas and the Palestinian Islamic Jihad.

UBS, which is Switzerland's largest bank, broke several 1996 U.S. laws that prohibit persons and companies from engaging with state sponsors of terrorism and were designed to impede Iran's access to foreign capital, the suit said.

The lawsuit, filed in U.S. District Court in New York, cited U.S. government reports that conclude Iran has been the main sponsor of Hezbollah and Hamas since 1996, including providing tens of millions of dollars in cash annually. The U.S. government considers Hamas and Hezbollah terrorist organizations.

"UBS wholly refutes the allegations made in a civil claim in U.S. District Court by Plaintiffs' counsel alleging UBS to be in some way responsible for attacks by Hamas and Hezbollah in 1999; 2001 and 2006," the bank said in a statement. "This is rejected absolutely by UBS and will be vigorously defended."

In 2004, the United States fined UBS $100 million for transferring dollars to Iran, Cuba and other nations subject to U.S. trade sanctions, and then trying to hide the transactions.

Two years later, UBS said it had cut ties with all of its clients in Iran.

The people named in the suit include U.S. citizens in New York, California and Oregon. Several also live in Israel.

The plaintiffs were victims of attacks, including a July 30, 1997, Hamas suicide bombing of an outdoor market in Jerusalem that killed 15 people and wounded 168, the lawsuit said. The Hezbollah attacks were part of thousands launched at civilian targets in Northern Israel during July 2006, it said.

(Reporting by Christine Kearney and Leslie Gevirtz; Editing by Lisa Von Ahn)