Swiss banks will pay $1.25 billion to survivors, who in many cases represent loved ones killed in the Holocaust

In this story:

• First Swiss payment scheduled Monday
• German banks deny claims by 5 survivors
• Banks argue: claims already settled

NEW YORK (CNN) Jewish groups and the Israeli government have agreed on a plan to distribute a $1.2 billion settlement by Swiss banks to compensate for unreturned Holocaust-era assets, a Jewish group said Friday.

Under the plan worked out at a meeting in Jerusalem between Holocaust survivor groups, Jewish organizations and the Israeli government, hundreds of thousands of survivors will receive financial aid and medical services.

By the end of December, more than 100,000 Holocaust survivors will have received payments ranging from $500 to $1,200 under a separate $200 million Swiss humanitarian fund established last year by Swiss banks and businesses.

That settlement includes more than 50,000 survivors in the United States. The agreement on the $1.25 billion fund was reached last August under the supervision of a Federal court judge in Brooklyn, New York, who presided over a class action suit filed on behalf of Holocaust survivors.

The first installment of $250 million is to be placed in an escrow account in New York on Monday and will be followed by three annual payments of more than $330 million each. The Brooklyn Federal Court must approve the allocation plan -- a move that could take between six and nine months.

Under the plan approved in Jerusalem, all legitimate claimants and their heirs to dormant Swiss bank accounts will receive their full proceeds -- an amount, a source told Reuters, that was expected to total about $100 million.

An independent commission headed by former U.S. Federal Reserve Board Chairman Paul Volcker has been auditing Swiss banks for more than two years to determine the value of the dormant accounts.

In the meantime, two German banks asked a U.S. federal court on Friday to dismiss an $18 billion class-action suit brought against them by five Holocaust survivors.

Deutsche Bank and Dresdner Bank, in a 70-page motion filed in U.S. District Court in Manhattan, denied the survivors' allegations that the institutions profited from property stripped away from death-camp inmates by Adolf Hitler's Nazi soldiers.

The banks asked that the suit be thrown out for several reasons, including that most of the evidence and witnesses are in Germany and that the matter of the property was essentially resolved at the close of World War II.

The five Holocaust survivors filed the suit in June on behalf of all death-camp survivors. In it, they charged that the banks worked with Nazis by accepting and selling personal property -- including gold teeth, jewelry and coins -- taken from inmates at German death camps.

The survivors demanded that the banks disclose and identify all accounts established prior to 1946, the year after World War II ended.

In their motion to dismiss, the German banks said they "were long ago required to turn over such property, first to the Nazi regime, and, to the extent such property remained at the banks after the war, to its rightful owners, Jewish successor organisations, or the Federal Republic of Germany."

The banks said allegations by the plaintiffs were basically settled at the close of the war "in negotiations on reparation, restitution, and compensation among Germany, the allied powers, Israel and nongovernmental Jewish organisations."

Charges that they worked with the Nazis and profited from the death camps "may not be reopened in this court on the basis of alleged civil claims," the banks argued.

There was no indication when the court would make a decision on the motion to dismiss. The survivors' attorney, Edward Fagan, could not be reached for comment.

Reuters contributed to this report.