UPDATE 1-Hezbollah says will not use Lebanon health ministry funds for own benefit

The leader of Lebanon's Hezbollah said on Monday it would never use state funds for its own benefit after it named the health minister in a new coalition government, adding that its choice for the post was close to the movement but not a member.

Hezbollah, heavily armed and backed by Iran, secured three seats in the new Lebanese government formed last week after months of wrangling. Shi'ite Muslim Hezbollah named a doctor, Jamil Jabak, as health minister, the first time it has held a ministry with a big budget. The U.S. State Department urged Lebanon's new cabinet to ensure resources do not help Hezbollah, which Washington deems a terrorist organisation.

Hezbollah's bigger role points to its appetite to shape state affairs, after gaining military clout from Syria's war next door. The United States has hit Hezbollah with fresh sanctions as part of its strategy to counter Iran. Hezbollah leader Sayyed Hassan Nasrallah said it had picked a health minister who is not a party member so that he could work and travel freely.

"Of course, (Jabak) is a brother and friend. He is close and trusted... This is a ministry for all the Lebanese people," Nasrallah said. He added it was forbidden under Islamic law to misuse state funds. Nasrallah said the new government's top priority must be fighting corruption and financial waste. "The consensus is that there is economic and financial danger," he said.

Lebanon's Western-backed Prime Minister Saad al-Hariri said last week bold and urgent moves were required to tackle chronic economic and other problems facing the heavily indebted nation. (Reporting by Ellen Francis Additional reporting by Nayera Abdallah in Cairo Editing by Gareth Jones)