Spain halted weapons transactions with Israel after the outbreak of the war in Gaza, which followed by Hamas's attack on Israel on October 7, 2023, and has devastated the occupied Palestinian territory, killing more than 50,000 people.

The interior ministry then sought to negotiate a termination of the 6.8-million-euro ($7.8 million) contract with Israeli firm IMI Systems, which was to have supplied bullets to the Spanish Civil Guard.

But those talks failed and the government has now unilaterally terminated the contract, the government sources said.

The deal had sparked outrage from the Socialists' far-left coalition partner Sumar, which said it was a "blatant violation" of the pledge not to trade arms with Israel and demanded its immediate cancellation.

After "exhausting all paths of negotiation", the offices of Prime Minister Pedro Sanchez, Sumar's Deputy Prime Minister Yolanda Diaz and "the competent ministries have decided to cancel unilaterally the ammunition purchase contract with Israeli company IMI Systems", the government sources said.

"The investment board for dual-use material will deny this company permission to import this equipment to our country for reasons of general interest and, immediately afterwards, the interior ministry will terminate the contract," the sources added.

The interior ministry had said the state legal services advised against scrapping the deal "due to the advanced stage of the processing of the contract" and because it would have had to pay without receiving the bullets.

The state legal services and relevant ministries were "examining possible legal reactions and complaints", the government sources added.

The Hamas attack in Israel resulted in the deaths of 1,218 people, mostly civilians, according to an AFP tally based on official Israeli figures.

Palestinian militants also seized 251 hostages in their attack and 58 remain in Gaza, including 34 the Israeli military says are dead.

Israel's military response in Gaza has caused a humanitarian crisis and killed at least 51,355 people, mainly civilians, according to the Hamas-run territory's health ministry.

The United Nations considers the figures reliable.

The International Criminal Court (ICC) has issued an arrest warrant against Israeli Prime Minister Benjamin Netanyahu for war crimes and crimes against humanity in Gaza.