The verdict of a New York court that the Jordan-based Arab Bank knowingly funded Hamas is being seen as a landmark victory against terror organisations around the world.

The case against the Arab Bank, one of the largest financial institutions in the Middle East, was launched in 2004 by a group of American victims of 24 terrorist acts in Israel.

One of the lawyers for the victims, Richard Heideman of the Washington DC-based firm Heideman Nudelman and Kalik, said after the September 22 verdict: "Every terrorist group, every terrorist supporter, and every funder of terrorism is now on notice that the US judicial system will protect the right of American victims to seek recovery, hold those [terrorists] accountable, and gain justice through our American courts."

Arab Bank, which is appealing against the verdict, said the decision had set a dangerous precedent and "exposes the banking industry to enormous liability for nothing other than processing transactions".

But one juror reportedly said that the verdict proved that "money and the financing is the oxygen for the terrorists".

This case has very wide implications for the banking industry

According to Nitsana Darshan-Leitner, founder and director of the Israel-based civil rights organisation, Shura HaDin, this was the very first example of victims having their day in court and seeing justice prevail against terrorists and the institutions that finance them.

"It has very wide implications in the banking industry," she said. "The banks have an obligation to know their customers, and not to financially aid and abet terrorists.

"This has been a ten-year effort - a very, very long case ending with a tremendous victory."

She said she represented about half of the 300 claimants in the case.

She also said that the case would set a precedent for similar, ongoing actions against banks in the UK, France and Canada.

In the Arab Bank case, the jury decided that the institution had flouted the US Anti-Terrorism Act - passed in the wake of the September 11, 2001 attacks on the World Trade Centre - by turning a blind eye to those who were receiving money. Recipients of Arab Bank funds ranged from known Hamas members and Hamas-linked aid groups to front organisations known as "Zakats" - Islamic charities.

The bank "offended basic common sense" by acting as if it did not know the real agenda of those to whom it was passing money, according to Peter Raven-Hansen, a lawyer for the plaintiffs and a professor at George Washington University in Washington DC.

Similarly, claimants convinced the jury that under the "Know Your Customer" provision of the 2001 US Patriot Act, banks operating in the US have a duty to go the extra mile in vetting the bona fides of clients.

Another lawyer for the claimants, Tab Turner, an Arkansas products liability lawyer, said that Arab Bank employees opened accounts for recognised Hamas leaders and saw documents directing Saudi money to the families of suicide bombers.

Ms Darshan-Leitner noted that the jury rejected the position of the bank that it was enough for it to verify their clientele against a list of blacklisted individuals and groups furnished by the US Treasury's Office of Foreign Assets Control (OFEC).

"There is strong evidence that Arab Bank knew they were dealing with terrorists but took no steps to prevent it," she said.

Mr Raven-Hansen reportedly stated that, based on the not-on-the-OFEC-list defence put forward by Arab Bank, it would have been acceptable for it to give money to Osama Bin Laden even if he were recognised by everybody at the bank but was not [yet] on that list.

Ms Darshan-Leitner was optimistic that the jury's decision would be upheld on appeal.

In Israel, she said, hundreds of similar cases have been brought before the courts over the past decade but only now are showing signs of making any progress.

The Israel courts and Foreign Ministry previously treated these actions as "political" cases, but are finally seeing them for what they are, as "purely civil".

"That is how they should be treated," Ms Darshan-Leitner said, "because that is exactly what they are."