OSLO (AFP) - Israeli companies excluded from Norway's powerful oil-fund after "unethical activity" in Palestine.

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Norway's state pension fund, one of the world's largest sovereign wealth funds, has excluded two Israeli companies for "unethical activity" linked to settlement building in the Palestinian territories, the Norwegian government said Monday.

According to the finance ministry, the so-called oil fund, which contains nearly all state revenues from the country's booming oil and gas industry, has sold its holdings in Africa Israel Investments, which is the largest shareholder of Danya Cebus, which the fund says is involved "in developing settlements in occupied Palestinian territory."

"Several United Nations Security Council resolutions and an International Court of Justice advisory opinion have concluded that the construction of Israeli settlements in occupied Palestinian territory is prohibited under (the Geneva) Convention," Finance Minister Sigbjørn Johnsen said in a statement.

"I have therefore accepted the recommendation of the Council on Ethics and am excluding Africa Israel Investments and Danya Cebus from the fund's investment portfolio," he said.

The Norwegian fund has sold all its shares in Africa Israel Investments, which were valued at 7.2 million kroner (911,000 euros, 1.2 million dollars) at the end of 2009 and has ruled out further investments in the company and its subsidiary.

The government also said Monday the pension fund would exclude a Malaysian forestry company called Samling Global due to "extensive and repeated breaches" of regulations of its activities in Sarawak, Malaysia and Guyana.

"The Council on Ethics has assessed Samling Global, and concluded that the company's forest operations in the rainforests of Sarawak and Guyana contribute to illegal logging and severe environmental damage," Johnsen explained.

At the end of 2009, Norway's state pension fund held 8.1 million kroner in stock in Samling Global, which have now been sold.

The fund, which is Europe's largest investor, held 2,792 billion kronor (353.2 billion euros, 448.7 billion dollars) in international stocks and bonds at the end of June.

Ethical directives from the government bar the fund from investing in manufacturers of weapons considered "particularly inhumane" and in companies known to be involved in large-scale human rights violations, corruption, the tobacco industry or environmental pollution.

Around 50 companies have already been blacklisted by the fund, including Boeing, Wal-Mart, EADS and BAE Systems.