LITTLE ROCK, Arkansas (Reuters) - Treasury Secretary John Snow on Thursday praised Saudi Arabia's decision to shut down one of that country's largest charities as part of the financial war on terrorism.

"I think the action they took yesterday was an important one. It was far-reaching. It indicates their seriousness of dealing with the issue of terrorism finance," Snow told reporters after meeting with a group of small business leaders in Little Rock.

Saudi Arabia announced on Wednesday it was dissolving the Riyadh-based Al-Haramain Islamic Foundation and will fold its assets into a new organization that will channel all Saudi charitable contributions abroad.

At its peak, Al Haramain was estimated to raise about $40 million to $50 million annually. U.S. authorities had previously accused several of the charity's overseas operations of channeling money to Islamic militant groups.

"I take it as another sign the Saudis are extremely serious about terrorist issues and terrorist finance issues and are making serous, important and good-faith efforts to deal with the problem," Snow said.

Prior to May 2003 suicide attacks in Riyadh that killed at least 35 people, some U.S. officials had privately complained the Saudis were not doing enough to choke off the supply of funds from the kingdom to militants.

Officials said those attacks spurred the Saudis to get tough on terror financing.

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