By Tova Cohen

TEL AVIV (Reuters) - Monitoring the sale of diamonds from Zimbabwe will be the focus of a meeting of diamond trade regulators in Tel Aviv next month, a leading Israeli diamond industry official said.

Rights groups, which accuse Zimbabwe's security forces of widespread atrocities to prevent thousands of people illegally mining on poorly secured fields in the east of the country, have been pushing for a ban on Zimbabwean diamonds.

"The first issue on the table is Zimbabwe and how to handle the crisis," Eli Avidar, managing director of the Israel Diamond Institute, told Reuters on Monday 24 May.

"There are two schools of thought. Non-governmental organisations support being tough but others support working with Zimbabwe, saying boycotting won't help."

Israel is hosting next month's talks as chair of the Kimberley Process -- a certification scheme set up to monitor diamond trades following wars financed by the gems.

Last month a high court in Zimbabwe ruled the government could sell diamonds from its controversial Marange fields. British-based industry group Global Witness said Zimbabwe has not yet complied with a plan agreed with the Kimberley Process to reform diamond mining operations.

President Robert Mugabe has accused Western countries of working to stop Zimbabwe from benefiting from its mineral resources but said the government will press ahead with controversial plans for foreign-owned companies, including mines, to cede majority stakes to locals.

Avidar said the Kimberley Process will seek to appoint an official regulator who will be in Zimbabwe to ensure the government adheres to the process.

TWO MEETINGS IN ISRAEL

Representatives of some 70 countries in the Kimberley Process will meet in Tel Aviv June 21-23. It will be followed by a higher level meeting in November in Jerusalem.

Other issues to be addressed include requests from some countries, such as Syria, to join the process as well as an expansion of the process's capabilities.

A different country chairs the process every year but some members want to create a permanent secretariat.

"The only government that does not want to be part of the Kimberley Process is Venezuela," Avidar said. "Legally you cannot trade Venezuelan diamonds."

Israel is one of three major centres for polished diamonds alongside Belgium and India. Israel's net polished diamond exports in the first quarter of 2010 jumped 55 percent from a year earlier to $1.45 billion after a 37 percent drop in all of 2009 to $3.92 billion.

Though the IDI sees an upward trend in 2010, exports still have not reached the level of the first three quarters of 2008.

While the United States remains Israel's biggest market accounting for 50 percent of exports, Asia is expanding with Hong Kong accounting for 28 percent of its exports.