JERUSALEM - A Jewish group that owns hundreds of thousands of acres of Israeli land must allow Arabs to buy the tracts, Justice Ministry officials said Thursday, ending decades of sales to Jews only.

Until now, non-Jews have been barred from land tenders issued by the quasi-government Jewish National Fund, an issue that raised the thorny problem of Israel´s desire to be both a Jewish state and give equal rights to its Arab minority.

The decision by Attorney General Meni Mazuz to allow non-Jews to buy the fund´s land - originally purchased using donations from Jews around the world - provoked an outcry among hard-line Israelis, who called for his firing.

Israeli Arabs criticized another part of the decision - compensating the JNF with state land for parcels of land it sells to non-Jews.

Mazuz made the decision in a meeting Wednesday with members of the JNF and the Israel Lands Authority ahead of a Supreme Court hearing on the issue of the selective sales, the Justice Ministry said.

The ILA, a body which holds all government land, is responsible for the JNF sales as well.

"The attorney general is convinced that the Israel Lands Authority, as a government body, is obligated to uphold the principles of equality. This obligation includes the marketing of lands belonging to the JNF," the statement said.

However, Mazuz also said that in any case where a non-Jew buys JNF land, the government would compensate the organization with state- owned tracts "so as not to harm the goals of the JNF ... to settle Jews on its land."

The JNF, founded in 1901 to buy plots in then-Ottoman-ruled Palestine, describes itself as "the caretaker of the land of Israel, on behalf of its owners - Jewish people everywhere."

To a large extent, land owned by the JNF defined the early borders of the state of Israel.

Hard-line Israelis slammed Mazuz for the decision.

"He is using the law to commit a crime," said lawmaker Arieh Eldad, from the ultra-nationalist National Union Party.

"For more than 100 years, money has been collected from Jews all over the world. ... As a small child, we would put money into the small blue boxes every Friday because they explained to us they were buying land for Jews in Israel," Eldad said.

"Now, along comes the attorney general and steals the money from me and my grandfather and decided to give it to the Arabs," Eldad said, calling on Prime Minister Ariel Sharon to fire Mazuz.

The JNF played down the decision, calling it a procedural matter.

"I do not know of any dramatic, historic decisions," Yehiel Leket, a JNF director, told Israel Army Radio.

Leket said Mazuz merely voiced his support for "practical measures so we can avoid being subject to the Supreme Court or legal rulings."

Arab Israeli lawmakers also condemned the move, saying the provision to compensate the JNF from state-held land was another means of continuing the discrimination.

Mazuz and the JNF have "institutionalized a decision to continue with this racist policy , but in politically correct language," said lawmaker Azmi Bishara.

The Association for Civil Rights in Israel, one of the Supreme Court petitioners, welcomed the decision but also expressed concern over the reimbursement idea. (Copyright 2005 Associated Press. 01/27/05)