* Report names 112 business groups in Israel, 6 other countries
* UN rights boss Bachelet says issue is "highly contentious"
* Her spokesman says it is not "a blacklist"
* Israeli foreign minister rejects "shameful capitulation"
Palestinian minister claims "victory of international law" (Adds quotes, details)
By Stephanie Nebehay
GENEVA, Feb 12 (Reuters) - The United Nations human rights office issued a report on Wednesday on companies it said have business ties to Israeli settlements in the West Bank, drawing ire from Israel but winning praise from Palestinians.
It said it had identified 112 business entities which it has reasonable grounds to conclude have ties with Israeli settlements - 94 domiciled in Israel and 18 in six other countries including the United States, Britain and France.
Inclusion on the list has no immediate legal implications for the companies. Though Palestinians and much of the world view the settlements as illegal under international law, the United States and Israel dispute this.
But the issue is highly sensitive as companies named could be targeted for boycotts or divestment aimed at stepping up pressure on Israel over its West Bank settlements.
"I am conscious this issue has been, and will continue to be, highly contentious," U.N. High Commissioner for Human Rights Michelle Bachelet said in a statement.
Bachelet's office said the report "does not provide a legal characterization of the activities in question, or of business enterprises involvement in them."
Her spokesman, Rupert Colville, said in videotaped remarks made available to reporters that work on the report involved extensive cross-checking and use of company annual reports.
He said it was "not a blacklist, nor does it qualify any companies' activities as illegal".
There was no immediate reaction by the United States, Israel's main ally, but Israeli Foreign Minister Israel Katz called the report a "shameful capitulation" to anti-Israel groups.
Israeli Prime Minister Benjamin Netanyahu made clear he considered the U.S. government's position on settlements under President Donald Trump as more important than the views of U.N. organizations.
"We will ensure the (U.S.) recognition of our sovereignty over those settlements - that will cancel out the entire impact of the United Nations because the United States is more important than the U.N.", he told Army Radio.
Palestinian Foreign Minister Riyad Al-Maliki welcomed the report as a "victory for international law" and urged U.N. member states to issue instructions to the companies listed "to end their work immediately with the settlement system".
"COMPANIES ON NOTICE"
Human rights groups also broadly welcomed the report. Bruno Stagno, deputy executive director for advocacy at Human Rights Watch said in a statement the report "should put all companies on notice: to do business with illegal settlements is to aid in the commission of war crimes."
Israel captured the West Bank in a 1967 war. Palestinians deem the settlements, and the military presence needed to protect them, to be obstacles to their goal of establishing a state. Israel disputes this.
The United States in effect backed Israel's right to build Jewish settlements on Nov. 18 last year by abandoning its long-held position that they were "inconsistent with international law".
The report was issued on the eve of the U.N. Human Rights Council's main annual session opening in Geneva from Feb 24. Neither Israel nor the United States are members of the forum which both accuse of a bias against Israel.
None of the companies named made any immediate comment on their inclusion on the list.
Home-rental company Airbnb, which was included on the list, had already acknowledged having listings in settlements and said last April that it would donate proceeds from any bookings in the territory to international humanitarian aid organizations. (Additional reporting by Maayan Lubell and Jeffrey Heller in Jerusalem and Ali Sawafta in Ramallah; Editing by Timothy Heritage)