Israel's finance minister has confirmed that Jews from Iraq, Morocco and Algeria will be entitled to compensation for the first time.

Moshe Kahlon said Jews from across the Middle East and North Africa - who were persecuted in their home countries after the establishment of Israel in 1948 - would be entitled to receive an annual grant of £620 (3,600 shekels), as well as discounts for medicine.

To date, grants have largely been reserved for Holocaust victims. Jews from Tunisia and Libya already receive annual grants starting from £4,550 (26,400 shekels).

Mr Kahlon said the awarding of the money was "a correction of an historic injustice". It came as a result of a campaign led by Iraqi Jews.

Activists have long called on Israel to officially recognise the close ties between Hitler and the Iraqi government at the time. The Farhud - a 1941 pogrom in Baghdad which historians say killed 600 Jews - was led by a Nazi-inspired mob.

Lyn Julius, the founder of Harif, a UK association of Jews from the Middle East and North Africa, said: "Of course the amount being given to victims is not enough, but the principle is more important here. It's about recognition - not quibbling over the amount."