April 4 (Reuters) - McDonald's is buying its

30-year-old Israel franchise from Alonyal Ltd, taking back

ownership of 225 restaurants in the country that employs more

than 5,000 people, the companies said on Thursday.

The U.S. fast-food chain has been subject to boycotts and

protests since Alonyal announced shortly after the Oct. 7 attack

by Palestinian Islamist group Hamas that it would be donating

free meals to Israeli military.

McDonald's is a global chain but its franchises are often

owned locally and operate autonomously.

Its CEO Chris Kempczinski had said in January the company

has seen "meaningful impact" in several markets in the Middle

East and some outside the region due to the Israel-Hamas

conflict.

"McDonald's remains committed to the Israeli market and to

ensuring a positive employee and customer experience in the

market going forward," Jo Sempels, president of International

Developmental Licensed Markets, said on Thursday.

After the completion of the transaction in the coming

months, McDonald's will own Alonyal's restaurants and operations

while retaining its employees, Omri Padan, CEO and owner of

Alonyal, said.

The companies did not disclose the terms of the transaction.

Another major Western fast food chain Starbucks ( SBUX ) has

also seen boycott campaigns over their perceived pro-Israeli

stance and alleged financial ties to Israel.

(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Arun

Koyyur)