An Israeli court Wednesday postponed the deadline for a container in Haifa capable of holding 12,000 tonnes of ammonia to be emptied of its toxic content, judicial sources said.

The court gave Haifa Chemicals until February 26 to remove the liquid-form chemical from its tank, located in the northern city's Mediterranean bay, the sources said.

An initial ruling on Sunday had given the company until February 22 to clear out the container.

Lawyers representing Haifa Chemicals argued in an appeal hearing that data put forward by the municipality to justify the container's closure were "exaggerated" and "intended to spread fear among the population".

They also argued that a halt on ammonia supplies would paralyse activity at "sensitive security installations such as the Dimona nuclear station" in the south of the country as well as military companies.

But they did not give further details of how ending ammonia supplies would affect activity at the Dimona plant in the Negev desert, which foreign experts believe is key to Israel's undeclared nuclear arsenal.

The Haifa municipality asked to close the ammonia tank after a decades-long campaign by environmental groups.

The push received added urgency last year when Lebanon's Hezbollah leader Hassan Nasrallah said the ammonia tank would be like "a nuclear bomb" if hit by his group's missiles.

Nasrallah, whose group targeted the Haifa area in a 2006 war with Israel, echoed warnings from experts and activists cited in Israeli media that "tens of thousands of people" would be killed if the container was struck.

Ammonia, used in fertilisers, is poisonous to humans.