King Felipe VI of Spain has honoured Sephardic Jews who were banished during the Inquisition more than five centuries.

"Dear Sephardim, thank you for your loyalty," the king told representatives of Sephardic Jews from different countries, during a ceremony Monday at the Royal Palace in Madrid.

A law, which came into force last month, allows dual citizenship for descendants of Sephardim Jews. It aims to correct what the Spanish government calls the "historic mistake" of the country's monarchs Isabella and Ferdinand who in 1492 ordered Jews to convert to Catholicism or leave within the space of just weeks, under pain of death.

"Thank you for having kept like a precious treasure your language and your customs that are ours too. Thank you too for making love prevail over rancour and for teaching your children to love this country,’’ the king said.

There are an estimated 3.5 million Jews with Spanish ancestry around the world -- known as Sephardic Jews.

Spain’s Justice Minister Rafael Catala said his administration had already received close to 600 demands for Spanish nationality.