JERUSALEM - Israel's Bank Hapoalim POLI.TA said on Wednesday it was leading a group to finance El Al Israel Airlines ELAL.TA purchase of the carrier's 17th Boeing BA.N 787 Dreamliner aircraft.

In the past, El Al - which has an all Boeing fleet - has used foreign banks to fund its aircraft procurements.

But Chief Financial Officer Yancale Shahar said El Al sought to "support the Israeli economy and businesses in Israel, while deepening the involvement of Israeli banks in El Al's financing activities."

Hapoalim, one of Israel's two largest banks, along with participation from Mizrahi Tefahot Bank MZTF.TA will lend El Al $120 million for the purchase of its latest 787-9 aircraft. The loan is for 12 years with El Al able to use the funds within two years.

"Bank Hapoalim will continue to provide credit to companies and entities in the economy to finance their business expansion," said Oren Cohen, the bank's head of corporate finance.

El Al currently flies 12 Boeing 787-9s and four 787-8s and is expected to receive two more Dreamliner aircraft on lease in 2026. It also has signed an agreement to purchase three more Boeing 787-9 and has an option to purchase up to six more.

Earlier this year El Al signed a deal to purchase 20 short-haul Boeing 737 MAX aircraft, with an option for up to 11 more in a deal worth up to $2.5 billion.

Last week, El Al reported record profit and revenue for the third quarter, buoyed by its near-monopoly after many foreign airlines cancelled flights due to conflict in the region.

Company officials say all flights are full and it has not been able to expand its capacity.

(Reporting by Steven Scheer; editing by Jason Neely)