Israel says does not trade in Ivory Coast diamonds

UNITED NATIONS (Reuters) - Israel rejected on Wednesday accusations by a U.N. panel of experts that the Middle East nation may be involved in the illegal export and sale of so-called "blood diamonds" from the Ivory Coast.

Israel's Diamond Controller Shmuel Mordechai said he was shocked by what he called "false accusations" in the experts report to the U.N. Security Council on international compliance with U.N. sanctions imposed on the Ivory Coast.

Along with Israel, the panel on Tuesday also named the United Arab Emirates, Lebanon, Guinea and Liberia as some of the countries that needed to step up efforts to enforce a four-year-old U.N. embargo on buying rough diamonds mined in the Ivory Coast.

"Israel has never dealt in diamond trade with the Ivory Coast," Mordechai said in a statement. "We are shocked by these false accusations and completely refute them."

The Security Council is expected on Thursday to renew for another year embargoes on arms and rough diamond sales and other sanctions on the Ivory Coast, the world's top cocoa producer, which is still recovering from a civil war.

The Ivory Coast report recommended Israel "investigate fully the possible involvement of Israeli nationals and companies in the illegal export of Ivorian rough diamonds."

But Mordechai said the U.N. experts visited Israel twice in recent years and were provided with "unequivocal proof" that it had never dealt in rough diamonds from the Ivory Coast or any other countries that are not members of the Kimberley Process.

The Kimberley Process certification scheme, designed to eliminate the trade in "blood diamonds," was set up in 2003 in the wake of devastating civil wars in Angola, Sierra Leone, and Liberia, which were largely financed by illicit diamond trade.

Before its implementation, conflict stones made up about 15 percent of the world market. Though they are believed to account for less than 1 percent of stones bought and sold now, millions of carats produced annually remain untraceable.

Israel said it would lodge an official complaint about its inclusion in the U.N. report at a meeting of Kimberley Process members in Namibia next months.