* One in four in Jewish state can claim Spanish descent
* Exodus unlikely, but Israelis eye second passport
By Dan Williams
JERUSALEM, Feb 10 (Reuters) - The expansion of Spain's offer of citizenship to descendants of Jews it expelled en masse in 1492 has sparked interest in Israel, where the so-called Sephardim make up around a quarter of the population.
While no one predicts an Israeli exodus to economically bruised Spain, a passport granting access to the wider European Union appeals to many in the war-wary Jewish state - especially its disproportionately large Sephardic underclass.
Amending a decades-old law, Spain on Friday said it would allow foreign Sephardim - old Hebrew for Spaniards - who become nationals to keep their original citizenship.
Though the amendment awaits parliamentary ratification, the Spanish embassy in Israel said on Monday it had received "many" inquiries from potential applicants. Israeli media republished Madrid's list of typical Sephardic names, meant to help locate eligible kin, and celebrity candidates debated the opportunity.
"There is true pride in an Israeli passport, but if I also have a Spanish passport in my drawer, so what?" the best-selling Yedioth Ahronoth newspaper quoted model Natalie Dadon as saying.
Around 300,000 Jews lived in Spain before Inquisition-era monarchs Isabella and Ferdinand ordered them and the country's Muslims to convert to Catholicism or leave.
Most of the Jews expelled settled elsewhere in the Mediterranean and Middle East. Their descendants who moved to Israel after its 1948 founding were often sidelined by the dominant Ashkenazim, or Jews of northern European extraction.
Some Israeli Ashkenazim are dual nationals of European countries from which their families fled during the Holocaust.
"Finally we see the buds of equality," comedian Nadav Abakasis told Yedioth. "Now those (Israelis) of North African origin will also have somewhere to flee to in the next war."
Estimating that between 2 million and 3 million of Israel's 8.1 million citizens were descended from Jews expelled from Spain, broadcaster Army Radio quizzed a Sephardic lawyer, Leon Amiras, on how the ancestry could be proven.
He suggested presenting an old family Bible with Ladino inscription or an ancestor's Sephardic wedding document, adding that Spain stood to gain from drawing resourceful immigrants.
But Abraham Haim, head of the Council of Sephardic Community in Jerusalem, played down Madrid's new law, saying its outreach to Sephardim dated back to 1924 and through World War II, when Spain was neutral and some of its diplomats saved Jews from the Holocaust by giving them citizenship.
"This (amendment) will not bring thousands of new immigrants to Spain," said Haim, who framed the move as part of a rapprochement between Spain and Israel, which formally established ties only in 1986.
Among Israeli beneficiaries of Spain's Sephardic ingathering was Malaga resident Yehuda Cohen, 57. Seeking a reprieve from Israel's tensions, he said he obtained Spanish citizenship after proving his parents came from the Sephardic community of Turkey.
"It took three years. No one in Israel should delude themselves into thinking this is a quick process. And there are a lot of documents that have to be presented," he told Reuters.
An importer of religious ornaments, Cohen said he uses a different first name in Spain as Yehuda, in its local pronunciation, invokes New Testament villain Judas Iscariot.
"It's a Christian country, after all," said Cohen, adding that, after 12 years, he and his wife were returning to Israel next month.
"We miss the sense of family, the Jewish holidays," he said. (Writing by Dan Williams, Editing by Jeffrey Heller/Larry King)