Ireland’s £13 billion sovereign wealth fund will divest from several Israeli companies over their ties to West Bank settlements.

Finance Minister Finance Minister Michael McGrath said last week that the Ireland Strategic Investment Fund (Isif) would withdraw around £3 million of funding from the Jewish state’s economy.

The companies removed from the fund’s portfolio are Bank Hapoalim BM, Bank Leumi-le Israel BM, Israel Discount Bank, Mizrahi Tefahot Bank Ltd, First International Bank and Rami Levi CN Stores.

"Isif has determined that the risk profile of these investments is no longer within its investment parameters and that the commercial objectives of these investments can be achieved via other investments,” McGrath said in a statement.

“The decision will be implemented as soon as possible over the coming weeks. I am advised Isif will keep under review the alignment of relevant investments within its investment parameters and commercial objectives.”

While the move was made independently, he added, it is the “correct investment decision”.

Ireland’s prime-minister elect Simon Harris has since condemned Israel’s actions in Gaza as, “appalling and grotesque”.

Calling for an immediate ceasefire, the Fine Gael leader said: “We're seeing children being maimed and killed, innocent children. It is disgusting, it is despicable and it must stop.”

Sinn Fein representative John Brady said Irish divestment from Israel needed to go further.

“Sinn Fein has pushed the government this far, but today’s announcement does not go anywhere near far enough and must only be the start,” he said.

Ireland's outgoing leader Leo Varadkar called in February for the European Union to review its trade agreement with Israel over the Gaza war, in a sign of the deteriorating relationship between the two countries.