JERUSALEM (Reuters) - Israeli customs have seized a shipment of 450 singing, dancing Osama bin Laden and Saddam Hussein dolls under a law banning incitement.

The battery-powered Chinese-made figurines were confiscated at the northern port of Haifa, Customs Authority spokeswoman Idit Lev-Zerahiya said on Wednesday.

An Israeli Arab businessman from the northern village of Qafr Qara admitted under questioning to importing the 400 copies of the al Qaeda leader and 50 of the deposed Iraqi ruler, as a "gimmick" for sale to Jews and Arabs, a customs statement said.

"The law doesn`t exactly say that you cannot own a bin Laden doll, but neither he nor Saddam Hussein are exactly good educational role models," Lev-Zerahiya told Reuters.