OSLO/COPENHAGEN (Reuters) -Norway's sovereign wealth fund, the world's largest, said on Monday it had decided to exclude another six companies with connections to the West Bank and Gaza from its portfolio, following an ethics review of its Israeli investments.

The $2 trillion wealth fund did not name the companies it had decided to exclude but said these would be made public, along with specific reasons for each company, once the divestments were completed.

One possibility could be that among them are Israel's five largest banks, which have been under review by the fund's ethical watchdog.

The latest exclusions bring to 23 the number of Israeli companies the fund has been divesting from since June 30. That number may rise.

"More companies could be excluded," Finance Minister Jens Stoltenberg told reporters.

Currently the fund holds stakes in 38 Israeli companies, totalling 19 billion crowns ($1.9 billion) in investments, down from 61 companies totalling 23 billion crowns, as of June 30, the fund's operator, Norges Bank Investment Management, said in a letter dated Monday.

REVIEW

The latest announcement follows an urgent review launched this month after reports that the fund had built a stake in an Israeli jet engine group that provides services to Israel's armed forces, including the maintenance of fighter jets.

The reports spurred a fresh debate about the fund's investments in Israel and the occupied Palestinian territories ahead of elections on Sept. 8, with some parties calling for the fund to divest from all Israeli companies, a step the government has ruled out.

Norway's parliament in June rejected a proposal for the fund to divest from all companies with activities in the occupied Palestinian territories.

"This debate helps sharpen our practices," said Stoltenberg.

Critics say only a complete withdrawal from investing in Israeli companies would protect the fund against possible ethical breaches.

Stoltenberg said that, from now on, the ethics watchdog and NBIM would have more frequent and faster exchanges of information between them to identify problematic companies quicker.

Ethical exclusions from the fund are based on recommendations from the fund's watchdog, though NBIM can also divest from companies if it assesses that a company can pose too much of a risk to the fund, whether the risk is ethical or not.

"With more exchanges of information between the Council on Ethics and Norges Bank, it is possible that there could be more divestments of that kind in future," said Stoltenberg.

Last Monday, the fund announced it was terminating contracts with all three of its external asset managers who handled some of its Israeli investments.

($1 = 10.1890 Norwegian crowns)