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* Jews say government campaign is proxy for anti-Semitism
* Say PM Orban uses U.S. financier Soros as scapegoat
* Nationalist Orban's billboards feature Soros's image
* Spokesman says campaign nothing to do with anti-Semitism
* Orban awaits visit from Israeli PM Netanyahu in July
By Marton Dunai
BUDAPEST, July 6 (Reuters) - Hungarian Jews said on Thursday Prime Minister Viktor Orban's billboard campaign against migration and foreign influence, using the image of U.S. financier George Soros, was a proxy for anti-Semitism.
They urged the nationalist Orban to halt the campaign. "Please make sure this bad dream ends as soon as possible," Andras Heisler, chairman of the Federation of Hungarian Jewish Federations (Mazsihisz), said in an emailed statement.
Orban's spokesman said the campaign had nothing to do with anti-Semitism but rather sought only to counter what he called Soros's attempts to unduly change immigration policies in Hungary.
Orban has locked horns with fellow European Union members in the west of the bloc over his opposition to immigration and liberal values and has criticised Soros - a major supporter of democracy and human rights causes - in increasingly sharp tones.
Orban, who faces elections next year, long proclaimed zero tolerance for anti-Semitism though has more recently risked angering Israel and Jews with remarks apparently meant to court far right voters.
His government has conducted a "national consultation" on issues of foreign influence and mass immigration, asking people if they were open to allowing either. Voters who responded rejected both and Orban launched a massive follow-up campaign.
The campaign focuses on Soros, 86, a Hungarian Jew who emigrated after World War Two, made a fortune in the United States and has long been heavily involved with groups promoting liberal democratic and open-border values in post-Communist eastern Europe, a cause at odds with Orban's world view.
Billboards around Hungary and full-page ads in media across the central European country depict Soros grinning contentedly against a blue background with the inscription: "Don't let George Soros have the last laugh."
Some Soros billboards have been defaced with the words "stinking Jew" in magic marker. Around 100,000 Jews live in Hungary.
"This campaign, while not openly anti-Semitic, clearly has the potential to ignite uncontrolled emotions, including anti-Semitism," the Federation of Hungarian Jewish Congregations (Mazsihisz) said in an emailed statement.
The campaign uses "imagery that evokes memories of the Nazi posters during the Second World War showing 'the laughing Jew'," Human Rights Watch campaigner Lydia Gall told Reuters. "The campaign encourages anti-Semitism."
Soros, who rarely addresses personal attacks against him, was not immediately available for comment through a spokesman.
Soros has called Orban's rule a "mafia regime" and has funded groups in Hungary that promote democratic transparency, human rights and a positive approach to immigration.
Orban's government fortified Hungary's southern border in 2015 against a large influx of migrants from the Middle East and Africa into the EU that year and has rejected a quota scheme agreed by EU leaders to distribute migrants among member states.
Heisler said Orban was using Soros as a scapegoat and that carried serious risks.
"Graffiti has appeared on the posters on the streets of Budapest and other cities reminding us of a dark era in Hungary's history, but the invisible social damage is probably already worse than that," Heisler wrote.
Government spokesman Zoltan Kovacs said Orban met with Jewish organisations on Thursday and told them the billboard campaign was only calling attention to what he said was Soros's undue interference in Budapest's migration policies.
"The campaign has nothing to do with the heritage of George Soros or anyone else," Kovacs said.
Orban, who expects a visit from Israeli Prime Minster Benjamin Netanyahu later this month, said last week he expected confrontations over anti-Semitism.
"Let us be vigilant: our opponents use the anti-Semitism card. We reject that," he told an event of his Fidesz party.
"Those who charge us with anti-Semitism bring tens of thousands of anti-Semites into Europe through migration. So our migrant policies serve the interests of European Jewish communities even if they don't stand up for their own interests, and quietly tolerate the unfair attacks that Hungarians receive as they protect them too." (Reporting by Marton Dunai; editing by Mark Heinrich)