By Allyn Fisher-Ilan and Stephanie Nebehay
JERUSALEM/GENEVA (Reuters) - A United Nations inquiry into possible war crimes in the Gaza conflict will produce its report on time next month despite the resignation of its chairman, officials said on Tuesday, brushing aside a demand from Israel's prime minister to shelve it.
Canadian academic William Schabas, the head of a U.N. inquiry into last summer's war between Israel and Gaza, said on Monday he would resign after Israeli allegations of bias due to consultancy work he did for the Palestine Liberation Organisation.
Netanyahu said in a statement that following the resignation, publication of the report ought to be shelved and that the Hamas Islamist group in Gaza should be investigated rather than the Jewish state.
More than 2,100 Palestinians, most of them civilians, 67 Israeli soldiers and six civilians in Israel, were killed in the conflict.
Schabas' resignation follows a letter from Israel's ambassador to the United Nations in Geneva, Eviatar Manor, to Human Rights Council President Joachim Ruecker of Germany decrying what he called a "blatant conflict of interest" and Schabas' prior relationship with the Palestinians. He demanded his immediate dismissal.
The Jan. 30 letter was made public on Tuesday.
Israel has long accused the council of bias against it and announced months ago that it would not cooperate with the inquiry, calling it a "kangaroo court".
Schabas said in a letter to Ruecker he had been paid $1,300 for a legal opinion to the PLO in Oct. 2012, but that he had acted with full "independence and impartiality" as chairman.
"The President respects the decision of Professor Schabas and appreciates that in this way even the appearance of a conflict of interest is avoided, thus preserving the integrity of the process," Ruecker said in a statement.
The investigators are "now in the final phase of collecting evidence from as many victims and witnesses as possible from both sides", he said.
The inquiry was set up by the Geneva forum last July at the Palestinians' request. The council resolution condemned the Israeli assault that it said had involved "disproportionate and indiscriminate attacks" including aerial bombing of civilian areas and collective punishment.
Its other two members are Doudou Diene of Senegal and Mary McGowan Davis of the United States. A new chairperson may be announced later in the day, spokesman Rolando Gomez said.
Schabas, in his letter, said he had not been asked to provide any details of his past activity concerning Palestine and Israel. His curriculum vitae and blog were public, he said.
"This work in defense of human rights appears to have made me a huge target for malicious attacks, which, if Israel's complaint is to be taken at face value, will only intensify in the weeks to come," he said.
Rather than waiting for a legal opinion from the world body in New York, which would delay final drafting of its report, its work would be better served by his resignation, he said.
"Time was very important now. There are only a few weeks left before the commission of inquiry finishes its work and I was becoming an obstacle and a distraction to the commission. So I had to get out of the way and let it get on with its work so it can prepare its report," Schabas told Israel Radio.
(Editing by Angus MacSwan)