Hundreds of ultra-Orthodox Jews demonstrated on Saturday at Intel Corp.'s new electronic chip plant in Israel in protest against work taking place at the site on the Jewish Sabbath.

However, a company spokesman said the plant was operating within the law and would continue to do so.

Intel, the world's biggest chip manufacturer, opened the west Jerusalem plant for installation work before its inauguration on Sunday.

The protesters said this was a desecration of the Sabbath, which runs from Friday night to Saturday night. They were dispersed by police.

Previous such protests have sometimes spilled over into street violence and long negotiations as authorities struggled to meet the demands of ultra-Orthodox Jews and secular Israeli laws.

Intel spokesman Koby Bahar said talks had taken place with ultra-Orthodox leaders over the new plant, which will prepare dies as part of the next stage of wafer production.

He made it clear work would continue as planned.

Intel has been operating in Jerusalem for 24 years and therefore this plant does not represent a change to the status quo, he said. This plant will operate in accordance with our business needs and the law, including on Saturdays.

Intel Israel is one of Israel's largest exporters, with nearly $1.4 billion in 2008.

Intel's $3.5 billion Fab 28 chip plant opened late last year in Kiryat Gat in southern Israel.

Intel also operates four research and development centres in Israel. The new Jerusalem plant will employ 150 people.

(Writing by Dan Williams; Editing by Andrew Dobbie)

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