UN Secretary-General Ban Ki-moon will demand that Israel pay Lebanon $1 billion in compensation over damages caused during the Jewish state's 2006 war against Hizbullah, Lebanese media reported Saturday.

According to the report, the sum, based on World Bank appraisals, is aimed at covering the environmental and material damages caused by the Second Lebanon War, to neighboring countries as well.

The fundamental part of the compensation demanded is for the damage caused to the Lebanese coast due to an oil spill following an Israeli bombing of a southern Beirut power plant, which the Lebanese said had caused "an ecological disaster."

According to the report, Ban plans to submit a report to the United Nations General Assembly at the end of the month, stating that damage Israel caused to the oil reservoir polluted Lebanon's coast, and that the pollution spread to neighboring countries, especially Syria.

Ban further notes that the UN rehabilitation plan managed to clean some of the oil spill in several areas in northern Lebanon seashores.

The oil spill, which was defined the greatest natural disaster in Lebanon's history, took place after Israel Air Force planes hit a power plant and caused some 110,000 oil barrels to leak into the Mediterranean Sea.

The report said that the UN wants Israel to compensate the countries harmed by the oil spill and restore the environmental situation along the Lebanon coast. The Jewish state has yet to respond to the demand, despite messages conveyed in August 2007.

About half a year ago, new agencies reported that the German government granted Lebanon 4.5 million euros (about $6.4 million) to help finance environmental projects and damage restoration activities following the war.