Selling a house or land in Israel to anyone who is not Jewish is forbidden, Shas spiritual leader Rabbi Ovadia Yosef said during a Thursday morning halacha lesson.

The rabbi cited the halacha as saying that the property should be sold to a Jewish buyer, even if he offers a lesser amount for it.

Dozens of students, Shas leaders among them, attended the lesson in the rabbi's Jerusalem home.

"The words were perceived by those who were present as normal discussion of the halacha, and not within a context of current events," said one student who did not want to be identified. He added that the rabbi spoke of a known and accepted law of the halacha, one that no one disputes. It should not be perceived as a reinforcement of a recent ban on selling property to Arabs declared by Safed rabbis, he said.

The rabbis from Safed signed a public statement that declared that under no circumstances should a home or a piece of land in Israel be sold to anyone who is not Jewish. The statement caused a violent clash to break out between Jewish and Arab students in the north Israeli city.

The rabbis cited the same law of the halacha as a reason for the ban. Another reason they listed was that selling or renting to someone who is not Jewish will ruin relations within the neighborhood, because the resident will disturb the lives of those living next to him.