UNITED NATIONS/OSLO, Sept 25 (Reuters) - A spat between

the United States and Norway over the Nordic country's wealth

fund's divestment from U.S. construction equipment-maker

Caterpillar ( CAT ) appears to be coming to an end, Norwegian

Foreign Minister Espen Barth Eide said.

Washington and Oslo have been at odds over the decision by

Norway's $2 trillion sovereign fund, the world's largest, to

divest in August from Caterpillar ( CAT ) due to the company's supply to

Israel of bulldozers used in Gaza and the occupied West Bank.

The U.S. State Department said in September it was "very

troubled" by the move. Trump ally and Republican U.S. Senator

Lindsey Graham had suggested the U.S. should impose tariffs and

visa revocations in retaliation.

Since then, the situation appears to have improved,

according to Norway's foreign minister.

"They have expressed their discomfort with this and then we

have explained that this is something that is not on the

government agenda as such," Barth Eide said in an interview on

the sidelines of the United Nations General Assembly. "I believe

that's settling that particular case."

He did not give more specifics.

Norway has said the government had not taken the decision to

divest from Caterpillar ( CAT ). Instead, it was taken by the board of

the central bank, upon recommendation from the fund's ethics

watchdog, as per guidelines decided by parliament.

The fund's ethics watchdog has said that, in its assessment,

Caterpillar's ( CAT ) products such as bulldozers were being used by

Israeli authorities "to commit extensive and systematic

violations of international humanitarian law" such as the

"widespread unlawful destruction of Palestinian property".

The watchdog said Caterpillar ( CAT ) has "not implemented any

measures to pre­vent such use".

Caterpillar ( CAT ) has not responded to requests for comment.

Israel's embassy in Oslo declined to comment at the time.

The fund had sold its entire holding in Caterpillar ( CAT ) by the

time it said it had divested from the company. It held a 1.17%

stake worth $2.1 billion on June 30, according to fund data.