The bank was sued in January by 15 families including the victims of a bus bombing in Jerusalem on August 19, 2003 that killed 20 people — an attack for which Hamas claimed responsiblity.

The families claimed that Natwest, now part of RBS, enabled Interpal, a charity that provides aid to poor and needy Palestinians, to raise funds through its website despite the US Government identifying it as a fundraiser for Hamas.

A federal court in New York last night approved the lawsuit, according to a statement by the families' lawyers, which means it may now proceed to trial.

The claimants include Tzvi Weiss, an American rabbinical student injured in the Jerusalem bus bombing while travelling to a wedding, and Daniel Rozenstein, a US citizen living in Israel who was severely injured in a suicide bombing at Mike's Place, a Tel Aviv bar, in April 2003.

The suit does not specify the amount of damages it is seeking. Steven Steingard, a lawyer for the claimants, told Times Online it would be premature to name a figure.

District Judge Charles Sifton dismissed RBS's attempts to have the suit thrown out after the bank argued that some of the transactions in question occurred too long before any of the attacks were carried out to be relevant.

A spokeswoman for RBS said: "It is important to remember that Interpal has been fully cleared by the UK Charities Commission. We are disappointed with the ruling and are discussing the position with our legal advisors.

"This is only the first stage of the court proceedings and we will continue to vigourously defend our case."

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