JERUSALEM Israel's jobless rate surged to near 10% in October, the Central Bureau of Statistics said on Monday, after the outbreak of war with Palestinian Hamas militants led to tens of thousands of displaced citizens who had lived near the Gaza border.

The main unemployment rate held steady at 3.4% last month.

But when taking into account what is expected to be a temporary loss of work, the rate reached 9.6% in October as 428,400 people were jobless versus 163,600 in September, prior to the Oct. 7 attack when Hamas gunmen rampaged though Israeli border towns.

In the wake of the attack, nearly 400,000 Israelis were called up to reserve duty, and official data show that about 80,000 Israelis were placed on unpaid leave in the last few weeks.

The employment rate in October dipped to 56.5% from 61.1%.

The bureau noted that due to the war it needed to make changes to its labour force survey last month, with nearly no interviews taking place the week after the attack while all subsequent interviews were by phone rather not in person.

It said that it did not survey from communities within 7 km (4.3 miles) from the Gaza Strip and that the response rate of the survey fell to 55.3% from 66.9% in September.

Israel's low jobless rate had underpinned economic growth, but with so many people furloughed or out of a job, the economy is expected to contract in the fourth quarter and grow a less than expected 2.3% in 2023.

(Reporting by Steven Scheer, Editing by William Maclean)