* Hungary says it will fight hatred with legal, political means
* Israel's Lapid: Hungary shares historical responsibility
By Marton Dunai
BUDAPEST, Oct 1 (Reuters) - Hungary will use all political and legal tools available to crack down on resurgent anti-Semitism in the country, the deputy prime minister said on Tuesday, in one of the government's boldest statements yet on the issue.
"We cannot allow, especially knowing our own responsibility, anti-Semitism to gain strength in Hungary," Tibor Navracsics told a conference on European anti-Semitism in the parliament building in Budapest.
"We will crack down with legal means if necessary and, while we can, we will make sure through political means that Hungary remains a republic of good men."
Hungary still has one of the largest and oldest Jewish communities in Europe, mostly in the capital, despite the decimation of the population in World War Two, when about 500,000-600,000 Hungarian Jews were killed, according to the Budapest Holocaust Memorial Centre. Jewish culture has flourished in recent years.
But Hungary has also seen a surge in anti-Semitism. The far-right Jobbik party has several times vilified Jews and the state of Israel in speeches in parliament, where it holds 43 out of 386 seats.
Anti-Semitic incidents have also spread. In the most recent case, on Sept. 17, bars of soap were nailed to the fence of the main synagogue in Szeged, Hungary's third-largest city, in a reference to the myth that the Nazis made soap out of the victims of the concentration camps.
The World Jewish Congress this year asked Hungary to do more to combat hatred. Prime Minister Viktor Orban strongly denounced anti-Semitism at that meeting and said in a newspaper interview Jobbik was a real danger to democracy.
Israeli Finance Minister Yair Lapid said at Tuesday's conference Hungarians shared responsibility for the deaths of Jews in the last months of World War Two, and today's politicians must ensure such tragedies did not happen again.
He recounted the story of his father Tommy, who narrowly escaped being killed along with thousands of other Jews herded to the banks of the Danube and shot in public in the winter of 1945, as Russian troops approached the city. Tommy Lapid served as deputy prime minister of Israel under Ariel Sharon in 2003.
"A genocide of this scope could not have happened without the active help of tens of thousands of Hungarians and the silence of millions of other Hungarians," said Lapid, who leads the second-largest political party of Israel's government.
"There is a stain on the honour of this house. For years we have tried to ignore this stain, but history has taught us that ignoring is never the right course ... Anti-Semitism has reared its ugly head in Hungary again. Hatred is not disappearing."
Navracsics said the government had changed the law to allow class action lawsuits against certain cases of hate speech, and tightened rules in parliament after a Jobbik deputy last year called for a list of Jews among parliament members to be drawn up to assess their allegiance.
"We know Hungarians were responsible for the Holocaust," Navracsics said. "Hungarians were perpetrators, and victims. Hungarians were shooting, and dying. It is a huge responsibility we must face in central Europe.
"We have learned from the past. We know what happened and we will not allow it to happen again. This democracy will defend itself against anyone who wants to incite hatred." (Editing by Sonya Hepinstall)