JERUSALEM, Jan. 7 (JTA) — Jewish Agency for Israel Chairman Avraham Burg has rejected Switzerland’s announcement that it wants to set up a restitution fund for Holocaust victims and their families. Switzerland said Tuesday that it wants dormant bank accounts of Holocaust victims and their heirs, not government money, to be used in the fund. The statement was viewed as an attempt to ease the international furor that resulted when then-Swiss President Jean-Pascal Delamuraz last week called Jewish demands for a $250 million compensation fund “blackmail.” But Burg was critical of the latest Swiss offer, saying, “They’re trying to buy us with money that’s not theirs.” Charging that the Swiss were “playing with words,” Burg blasted Swiss leaders for refusing to apologize for Delamuraz’s remarks. Burg said he would not take part in a joint commission’s search for dormant accounts in Swiss banks left by Jewish victims of the Holocaust until those remarks were retracted. “It would be difficult to a level of impossible for me to personally sit around the same table with people who did not negate, oppose or reject the words of the president,” said Burg, who met Monday with the Swiss ambassador to Israel. Swiss banking officials and Jewish leaders agreed last spring to form a joint commission to investigate the fate of funds that Jews deposited in Swiss banks in the World War II era. The joint commission, headed by former U.S. Federal Reserve Chairman Paul Volcker, includes Burg, other Jewish leaders and Swiss bankers. No further meetings of the committee have been scheduled, agency officials said. On Sunday, Burg and World Jewish Congress Secretary General Israel Singer announced at a news conference here that the World Jewish Restitution Organization was planning a series of retaliatory measures, including a boycott of Swiss banks, if the Swiss authorities did not denounce Delamuraz’s statements within a month. The WJRO was created in 1992 by the World Jewish Congress and the Jewish Agency for Israel. After Jewish leaders protested Delamuraz’s controversial remark last week, the Swiss leader said he was sorry if he offended families of Holocaust victims. But he repeated his view that it was not the right time to set up a compensation fund. Meanwhile, U.S. Sen. Alfonse D’Amato (R-N.Y.), who has spearheaded the congressional investigation of Jewish assets held by Swiss banks, urged the Swiss government to repudiate Delamuraz’s statement. “The silence of the [Swiss] Federal Council on the seriousness of these remarks is a telling feature of the country’s policy,” D’Amato wrote Tuesday in a letter to Swiss President Arnold Koller. Under the rotating system, Delamuraz now serves as Swiss economics minister. Earlier, the State Department reacted strongly to allegations made by Delamuraz last week that foreign critics were trying to undermine Switzerland’s role as a world financial center. “To make a charge that somehow an agency of the United States government is attempting to destabilize the Swiss banking system or is blackmailing the Swiss government is ludicrous,” said State Department spokesman Nicholas Burns. Burns said the U.S. government is continuing to search its own records to ascertain its actions in the late 1940s regarding the assets of Holocaust victims. “People have a right to see the truth,” said Burns. “And I think the Swiss government ought to take the same position on this issue.” Swiss bank shares fell this week in what some traders said was a response to the Jewish plans for a boycott. In addition, a Knesset subcommittee on the return of Jewish property met for the first time this week, hearing testimony from individuals involved in the restitution efforts. Ed Fagan, an American attorney who is lead counsel on a team suing Swiss banks on behalf of Holocaust survivors, told the committee that World War II could have ended earlier had the Nazis not been financially aided by the Swiss. Committee Chairman Avraham Herschson of the Likud Party released a list of Swiss banks that he claimed had secretly served Nazi interests. He also released two documents declassified by American investigators regarding the wartime activities of Swiss banks. One of the documents stated that Switzerland had received gold from Germany before the end of the war, either as payment for supplies or as deposits from German firms. The second document contained a list of blocked private individual accounts from different countries as well as the amount in each account.