OSLO, Aug 25 (Reuters) - Norway's $2 trillion wealth

fund, the world's largest, said on Monday it has divested from

U.S. construction equipment group Caterpillar ( CAT ) as well as

five Israeli banking groups on ethics grounds.

The five banks are Hapoalim, Bank Leumi,

Mizrahi Tefahot Bank, First International Bank of

Israel and FIBI Holdings, the fund said in

a statement.

The groups were excluded "due to an unacceptable risk that

the companies contribute to serious violations of the rights of

individuals in situations of war and conflict", said the fund,

which is operated by Norway's central bank.

Caterpillar ( CAT ) did not immediately respond to a request for

comment.

CATERPILLAR ( CAT )

The fund's ethics watchdog, called the Council on

Ethics, said that "in the council's assessment, there is no

doubt that Caterpillar's ( CAT ) products are being used to commit

extensive and systematic violations of international

humanitarian law".

The violations were taking place both in Gaza and the

West Bank, the council said, adding that "the company has also

not implemented any measures to pre­vent such use".

"As deliveries of the relevant machinery to Israel are

now set to resume, the Council considers there to be an

unacceptable risk that Caterpillar ( CAT ) is con­tributing to serious

violations of individuals' rights in war or conflict

situations."

The Norwegian fund announced on August 18 it would divest

from six companies as part of an ongoing ethics review over the

war in Gaza and developments in the West Bank, but declined at

the time to name any groups until the stakes were sold.

The fund's ethics watchdog, the Council on Ethics, had

initially been scrutinising Israeli banks' practice of

underwriting Israeli settlers' housebuilding commitments in the

region.