A diverse and stunning coral reef at Israel's southernmost tip is in danger of becoming the next victim of an oil pipeline mishap that has spilled millions of litres of crude onto a nature reserve and nearby desert land in one of the worst environmental disasters in Israeli history.

Weather forecasts suggest heavy rain which could lead to flash floods that convey the pollution from the Evrona Nature Reserve to the Gulf of Aqaba, site of one of the northernmost coral reefs in the world.

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"There is huge concern about the reef," said Amatzia Genin, director of Israel's Interuniversity Institute for Marine Sciences in Eilat, 20km south of the reserve.

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He said the reef on the Jordanian side of the gulf is also threatened.

"Oil damages corals and other animals in the reef and neighbouring ecosystems like sea grass meadows that are very important to the well-being of the reef," Mr Genin said.

"Oil mixed with sand would be partly buried on the bottom of the sea and slowly release upwards into the water."

The spill last Thursday was caused when the Eilat Ashkelon Pipeline Company sought to change the route of its pipeline.

Oil giant denied challenge to spill settlement

Meanwhile, the US Supreme Court has refused to hear energy giant BP's challenge to a settlement requiring it to pay hundreds of millions of dollars to businesses hurt by the 2010 Gulf of Mexico oil spill.

After a closed door hearing, the court's nine justices issued an order denying review of the settlement without comment.

The Mobile, Alabama Chamber of Commerce, the US Chamber of Commerce and a federation of German industries, had filed briefs in support of the companies involved in the settlement.

"The petition for a writ of certiorari is denied," the court said, rejecting BP's arguments that the losses claimed by the companies "were not fairly traceable to the spill".

The April 20, 2010 blowout of an offshore oil rig caused the largest marine oil spill in US history, with millions of barrels of oil gushing into the Gulf of Mexico before the leak was finally capped July 15.

Under the settlement, BP has so far paid out US$36.3 billion (NZ$47.4 billion) in fines and compensation to individuals, companies and local authorities and for clean-up operations on the US coastline.

In September, a federal judge in Louisiana found the British company guilty of "gross negligence", opening it up to an additional fine of up to US$18 billion.

- Independent, AFP