LONDON

Norway's $2 trillion sovereign wealth fund on Monday said it terminated all contracts with asset managers handling its Israeli investments over concerns on the situation in Gaza and the West Bank.

Finance Minister Jens Stoltenberg had ordered Norway’s central bank and the Ethics Council to conduct a review of the fund’s investments in Israeli companies.

"All investments in Israeli companies that have been managed by external managers will be moved inhouse and managed internally. We are terminating contracts with external managers in Israel," the fund said in a statement.

As of June 30, the fund held stakes in 61 Israeli companies, but in recent days divested in 11 of them.

"We have spent the recent days selling all our investments in Israeli companies that are not in the equity benchmark index. We have now completely sold out of these positions."

"These measures were taken in response to extraordinary circumstances. The situation in Gaza is a serious humanitarian crisis. We are invested in companies that operate in a country at war, and conditions in the West Bank and Gaza have recently worsened," said Nicolai Tangen, CEO of Norges Bank Investment Management.

"In response, we will further strengthen our due diligence. The measures we are taking will simplify the management of our investments in this market and reduce the number of companies that we and the Council on Ethics monitor."

​​​​​​​Norway had recognized a Palestinian state alongside Spain and Ireland in May of last year.