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UPDATE 1-U.S. appeals court voids verdict over Arab Bank and Hamas

(Adds comment from lawyer, details from decision, background)

NEW YORK, Feb 9 (Reuters) - A U.S. appeals court on Friday threw out a Sept. 2014 jury verdict finding Arab Bank Plc liable for knowingly supporting militant attacks in Israel linked to Hamas, a decision that triggers a settlement agreement with some plaintiffs.

The 2nd U.S. Circuit Court of Appeals in Manhattan said the Brooklyn jury weighing Arab Bank's alleged role in 24 attacks in the early 2000s had been instructed improperly about the "international terrorism" element of one of the plaintiffs' claims.

Subsequent to the verdict, Arab Bank reached a confidential settlement with 527 plaintiffs who were victims, or relatives of victims, of the attacks. Both sides agreed to forgo a retrial if the verdict were voided.

"The plaintiffs will receive meaningful and very substantial compensation for their injuries, and today's decision doesn't diminish the fact a jury found Arab Bank liable for knowingly supporting Hamas," Gary Osen, a lawyer for the plaintiffs, said in an email.

Paul Clement, a lawyer for Arab Bank, did not immediately respond to a request for comment.

Arab Bank, based in Jordan, had been accused of handling transactions for Hamas, and routing money to charities that supported the group or families of suicide bombers.

The U.S. Department of State designated Hamas a foreign terrorist organization in 1997. (Reporting by Jonathan Stempel in New York; Editing by Frances Kerry)