Israel hopes to issue euro bond in '09 worth some $1-bln

* Israel hopes for $1 bln international debt issue in 2009

* Prefers euro-denominated offering

By Steven Scheer

JERUSALEM, Jan 7 (Reuters) - Israel hopes credit market conditions improve in 2009 so it can finally go ahead with a euro-denominated bond worth around $1 billion, a senior Finance Ministry official said on Wednesday.

Israel has sought to issue a euro-denominated bond for two years, but poor market conditions and a largely balanced state budget that reduced the urgency to raise funds put those plans on hold.

"If things get better, we hope to do something," the official told Reuters, requesting anonymity.

"We want to do a euro issue but it depends on the market. Whichever market (Europe or United States) gets better first, we will go there," he said. "It will be around $1 billion."

The official said the ministry is in contact with underwriters Citigroup, Merrill Lynch and Deutsche Bank.