"More than 60 years after the war, we can finally look the survivors in the eye and say that we have done something for them," Olmert said.

The plight of Holocaust survivors sparked outrage after Olmert's office announced that the state would pay grants of around $20 each per month in 2008 to an estimated 120,000 needy survivors over 70 years and living in Israel.

Noah Flug, a representative of those who survived the Nazi genocide in World War II, told the news conference that he was "satisfied" with the increases.

Around 250,000 people living in Israel are classified as Holocaust survivors.

A third of them live below the poverty line, Flug said.

In August, Israel's government watchdog had slammed state assistance to the hundreds of thousands of elderly Holocaust survivors.

Its report said some 143,000 of the 250,000 survivors do not benefit from any financial aid, while 50,000 receive state aid and 57,000 benefit from reparations from the German and other governments.