Olmert confident in Israeli economic strength

JERUSALEM - Israeli Prime Minister Ehud Olmert today expressed confidence in the strength of his country's economy, following more than a month of Israeli-Hizbollah fighting.

"I have complete belief in the Israeli economy, in its strength," Olmert said in a speech to parliament after a UN-mandated truce went into effect.

Israel and Hizbollah have fought for 33 days since the Lebanese group abducted two Israeli soldiers in a cross-border raid last month. Thousands of Hizbollah rockets hit Israel and Israel carried out daily air strikes in Lebanon.

The rocket attacks into Israel badly hurt tourism and businesses in Israel's north.

Olmert said that rebuilding the north and returning it to economic normalcy is the "proper response to our enemies."

Most analysts and the Bank of Israel expect as much as 7 billion shekels of direct economic damage from the fighting and a reduction of about 1 percentage point from 2006 economic growth.

Israel's economy had been able to weather a short war due to its strength. Economic growth in 2006 was forecast at above 5 per cent for the second straight year.

- REUTERS