HIGHLIGHTS: Reconstruction Work From a Year to 18 Months to Complete||Worst Hit Was the Old City of Nablus||Priority Would be given to Housing & Institutions and Government Ministries ransacked by the Israelis|| STORY: The EU has refuted claims by the Israeli government that aid to the Palestinian National Authority was used to fund Palestinian Resistance bombers. The Israeli allegations were published in report made public on Sunday and was taken by the Israeli prime minister in person for a handover to president Bush during his current visit to Washington.

Meanwhile, A senior U.N. official on Monday estimated that Israel's military offensive in the West Bank caused between 300 million and 400 million US dollars damage to Palestinian property and reconstruction would take at least a year.

NABLUS HARDEST HIT

Among the places hardest hit was Nablus, the West Bank's largest city, where the damage was estimated at 110 million US dollars, including to the historical Green Mosque, said Tim Rothermel, the special representative of the U.N. Development Program responsible for the West Bank and the Gaza Strip.

Rothermel said representatives from the United Nations, the World Bank and the European Commission would complete their damage assessment by May 15 and draw up a plan for reconstruction.

The report will be distributed to international donors who would then channel funds or allocate additional money to specific projects. Rothermel said the German government has approved a grant for 9.4 million US dollars for job creation while discussions with the U.S. government on new funding had begun.

He estimated that repairs would take from a year to 18 months to complete.

Throughout the West Bank, many Palestinian government buildings were destroyed by heavy shelling while facilities for delivering water and electricity services were also badly damaged.

PRIORITY TO HOUSING & RANSACKED INSTITUTIONS & GOVT. BUILDINGS

Priority would be given to fixing broken windows, walls and ceilings "to get them (the Palestinians) back on their feet," Rothermel said in a telephone interview. Support would also be given to institutions and government ministries, which had been ransacked, and had their computers and files confiscated.

In Nablus, the building housing the governor's office was destroyed along with many official records, including land registration forms. In the town of Ramallah, the population registry and passport office were also demolished.

EU DENIES AID FUNDED BOMBERS

In another development, the European Union's head office issued a strong denial Monday to Israeli claims that millions of dollars of aid to the government of Palestinian leader Yasser Arafat were used to fund Palestinian bombers.

A report by the Israeli government made public on Sunday and carried by Prime Minister to President Bush during his current visit to Washington alleged EU aid money was being used to pay the salaries of hundreds of extremists.

EU spokesman Gunnar Wiegand told reporters in Brussels the aid, which totals 337 million US dollars over the past two years, was being spent on civilian purposes only.

Wiegand added that the EU closely monitored where the money went and what it was used for.

PHOTO CAPTION

Israeli occupation soldiers sit in a Merkava tank near Nablus, Monday, May 6, 2002, as a number of tanks surround the West Bank town. The Israeli occupation army has withdrawn from most of the West Bank towns, although its offensive against Palestinian militants continues. (AP Photo/Nasser Ishtaya)