Switzerland's largest bank confirmed today that documents discovered in its shredder room by a night watchman may have been related to property sold by Jews under the Nazis.

The Union Bank of Switzerland had previously maintained that the documents salvaged by the guard, Christoph Meili, were unrelated to dormant accounts of Holocaust victims.

Some of the documents were relevant to the research of an international panel of historians investigating Switzerland's dealings with the Nazis, the panel's secretary, Linus von Castelmur, told the Associated Press today. He declined to elaborate.

Since Jews were under Nazi pressure to sell their property in Germany at prices well below market values, the mortgages for a 1937 sale of property, possibly by Jews, could well come under the scope of the commission's work. Documents related to the sale were in the shredder room.

Meili, who lost his job after turning the documents over to a Jewish organization in January, is under investigation for breaking Switzerland's banking secrecy rules. He has fled to the United States with his wife and two children because he said he felt their lives were in danger. The U.S. Congress has moved to give them permanent residence status.

The bank has admitted that the documents' destruction violated a law requiring preservation of any evidence that might relate to investigations into the World War II era. Jewish groups have criticized Swiss banks for not being forthright in revealing records of Jewish gold and assets that disappeared in Switzerland following the war.

In Jerusalem Sunday, the chairman of Israel's quasi-governmental Jewish Agency criticized Paul A. Volcker, former chairman of the U.S. Federal Reserve, for warning that a lawsuit seeking to recover Holocaust victims' assets from Swiss banks could hamper other recovery work.

The New York Times reported over the weekend that Volcker, head of an independent committee investigating dormant Holocaust-era accounts in Swiss banks, said in a letter filed in U.S. federal court that he was afraid that Swiss bankers and other sources might stop cooperating with the committee if the lawsuit resulted in U.S. legal orders to disclose documents and sources.

Jewish Agency Chairman Avraham Burg, who is a member of Volcker's commission, said in a letter to the former Fed chairman released to the media Sunday:

"I was shocked to receive a copy of your letter to Judge Korman regarding the class-action suit on the issue of the Swiss banks. This letter . . . creates the impression that I also agree with its contents.

"To my great sorrow, whoever wrote this letter in your name or signed you on it without informing you of the far-reaching implications of this step misled you into an unpardonable error."

Burg added: "I ask you to inform the judge immediately that this letter does not represent the opinion of all members of the committee and at least not mine."

U.S. District Judge Edward Korman is to hear arguments in Brooklyn Thursday on a demand by Swiss banks that the suit be put on hold, the New York Times reported.

Meanwhile, arguing as a patriot with a passion for Swiss independence, industrialist Christoph Blocher is using his clout -- and money -- to turn Swiss opinion against a foundation that would aid Holocaust victims.

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