Key Points:

Attorney-General Michael Cullen has over-ruled a District Court judge's decision to issue an arrest warrant against a visiting former Israeli general the judge believed was answerable for Middle East war crimes.

Auckland District Court Judge Avinash Deobhakta on Monday issued warrants ordering the arrest of Moshe Ya'alon, a former Israeli Defence Force chief of staff and head of intelligence.

The warrants were in response to information laid with the court under New Zealand's obligations as a signatory to the Geneva Convention.

Papers lodged with the court, and obtained by the Herald, alleged General Ya'alon played a central role in the 2002 assassination of suspected Hamas commander Salah Shehadeb in Gaza City.

The assassination, in the form of a bomb strike on Mr Shehadeb's home, also killed seven members of the neighbouring Mattar family and 15 others.

The court papers said General Ya'alon later admitted to his part in the planning of the assassination and was, therefore, a party to the bombing.

Judge Deobhakta noted the bombing had drawn international condemnation and ordered the warrants be issued.

The application, in the name of an Auckland company director, Janfrie Wakim, established a prima facie case against General Ya'alon, he said.

"I am satisfied [the papers] disclosed 'good and sufficient reasons' to believe that he was, together with others, responsible for the bombing."

But the judge's warrant was never enforced and on Wednesday Dr Cullen ordered a stay of proceedings.

The minister said yesterday he issued the stay after advice from Crown Law that the evidence against General Ya'alon was not sufficient. But he sidestepped questions on whether the Government believed a war crimes case could be made against General Ya'alon.

In a written statement supplied to the Herald, he said: "The materials supplied to support the allegations could not be relied upon to show a prima facie case against the defendant."

Asked if the Government had any concerns about General Ya'alon's past conduct, he said: "The Crown has no evidence of any allegations that would be relevant in determining the legal issues."

Judge Deobhakta determined when issuing the ruling that the while any prosecution required the leave of the Attorney General to proceed, his consent was not needed to issue a warrant.

Dr Cullen said to his knowledge no Government officials, MPs or ministers had met General Ya'alon and "there has been no contact at any level" between his office and Crown Law and the Israeli Government or its Canberra-based embassy.

The honorary consul for Israel, David Zwartz, said General Ya'alon was in New Zealand on a private fundraising visit organised by the Jewish National Fund.

He was accompanied by the fund's director in Australia, where he had toured before coming to New Zealand.

Mr Zwartz said he did not believe there was any substance to claims General Ya'alon was a war criminal.

A statement issued last night by the London-based law firm Hickman and Rose - which represents the Palestinian Centre for Human Rights - said Palestinians were "devastated" by Dr Cullen's decision.

"An arrest and proper decisions on prosecution or extradition of Moshe Ya'alon should have taken place, based on the evidence presented to the court."

Davey Salmon of Auckland law firm LeeSalmonLong, which took the application to arrest to court, said the quashing of the warrants could reflect poorly on New Zealand's reputation internationally.

General Ya'alon is known to Palestinian groups as the Butcher of Qana.