The International Monetary Fund has blocked the candidacy of Israeli Stanley Fischer in the race to replace Dominique Strauss-Kahn.

Mr Fischer, who is 67, had hoped that the organisation would relax rules on its director being no older than 65. But the IMF refused to budge.

The Zambia-born economist, currently in his second term as governor of Israel's central bank, said he was disappointed but would "proudly" continue his work in Israel.

He said: "I think that the age restriction is not relevant today.

"I was hoping that the IMF board of directors would change its regulations, not only for the sake of my candidacy, but also for the sake of future candidates for the position of managing director".

The IMF told Reuters that the shortlist consisted of the frontrunner, French Finance Minister Christine Lagarde and Agustin Carstens, the Mexican central bank chief.