Arab Bank is accused of helping to fund Hamas and other groups

They accuse the bank of channelling Saudi money to Palestinian militant groups such as Hamas and Islamic Jihad.

The claim, filed in the US, accuses Arab Bank's New York branch of "laundering" the cash before sending it to branches in the West Bank and Gaza.

No one at Arab Bank was immediately available for comment on Tuesday.

The lawsuit also says the bank - based in Amman, Jordan - distributed insurance money to the beneficiaries of suicide bombers.

"We have a mountain of evidence that will prove that the bank not only knows about the terror financing, but is actively involved and using its New York branch to launder the money," Mark Werbner, the lead attorney for the families, said in a statement.

Arab Bank has 30 branches across the Middle East, Europe, the US, Australia and north Africa.