JERUSALEM, Nov 27 (Reuters) - Israel's Bank Hapoalim

said on Wednesday it was leading a group to finance El

Al Israel Airlines purchase of the carrier's 17th

Boeing 787 Dreamliner aircraft.

In the past, El Al - which has an all Boeing ( BA ) fleet - has

used foreign banks to fund its aircraft procurements.

But Chief Financial Officer Yancale Shahar said El Al sought

to "support the Israeli economy and businesses in Israel, while

deepening the involvement of Israeli banks in El Al's financing

activities."

Hapoalim, one of Israel's two largest banks, along with

participation from Mizrahi Tefahot Bank will lend El

Al $120 million for the purchase of its latest 787-9 aircraft.

The loan is for 12 years with El Al able to use the funds within

two years.

"Bank Hapoalim will continue to provide credit to companies

and entities in the economy to finance their business

expansion," said Oren Cohen, the bank's head of corporate

finance.

El Al currently flies 12 Boeing 787-9s and four 787-8s and

is expected to receive two more Dreamliner aircraft on lease in

2026. It also has signed an agreement to purchase three more

Boeing 787-9 and has an option to purchase up to six more.

Earlier this year El Al signed a deal to purchase 20

short-haul Boeing 737 MAX aircraft, with an option for up to 11

more in a deal worth up to $2.5 billion.

Last week, El Al reported record profit and revenue for the

third quarter, buoyed by its near-monopoly after many foreign

airlines cancelled flights due to conflict in the region.

Company officials say all flights are full and it has not

been able to expand its capacity.