JERUSALEM: The Bank of Israel said it would provide the banking system with up to 10 billion shekels ($2.6 billion) in a programme to help small businesses survive Israel's war with Hamas by gaining access to low-interest rate loans.

As part of the plan, the central bank will provide banks with loans for a period of two years at a variable interest rate of the Bank of Israel's benchmark rate, currently 4.75%, minus 1.5 percentage points.

These loans will allow banks to grant credit to small and micro businesses whose repayment has been damaged by at least 25% as a result of the war. ($1 = 3.9149 shekels) (Reporting by Steven Scheer; Editing by Hugh Lawson)