AFP - In a landmark decision, Israel's supreme court has thrown out a law allowing privately-run prisons, arguing that running jails for profit would be a "grave" violation of inmates' human rights.

"We have reached the conclusion that the very transfer of the powers to administer a prison from the state ... to the hands of private businessmen who operate for profit causes harsh and grave damage to the basic human rights of prisoners," presiding judge Dorit Beinish wrote in the ruling.

The ruling, issued on Thursday with the support of eight justices and one dissenting, overturns a law passed by parliament in 2004 that allowed the establishment of privately-run prisons.

The Academic College of Law filed a petition challenging the legislation, and the supreme court has deliberated for almost three years on the issue, during which time a company built a prison that was to be privately-run.

Earlier this year, the court issued an injunction preventing the prison from starting operations.

The ethics of allowing prisons to be run as a business has been hotly debated in several countries, including Australia, Britain and the United States which have privately-run correctional facilities.