During the war, Spain became an unlikely haven for several thousand Jews. They were mainly from Western Europe, fleeing deportation to concentration camps from occupied France, but also Sephardic Jews from Eastern Europe, especially in Hungary. Trudy Alexy refers to the "absurdity" and "paradox of refugees fleeing the Nazis' Final Solution to seek asylum in a country where no Jews had been allowed to live openly as Jews for over four centuries." <7>
Throughout World War II, Spanish diplomats of the Franco government, as well as diplomats from Switzerland, Sweden, Portugal and the Vatican, extended their protection to Eastern European Jews, especially in Hungary.
In the first years of the war, "Laws regulating their admittance were written and mostly ignored."<8> Once the tide of war began to turn, and Count Francisco Gómez-Jordana succeeded Franco's brother-in-law Serrano Súñer as Spain's foreign minister, Spanish diplomacy became "more sympathetic to Jews", although Franco himself "never said anything" about this.<8> Around that same time, a contingent of Spanish doctors traveling in Poland were fully informed of the Nazi extermination plans by the Gauleiter Frankel of Warsaw, who was under the misimpression that they would share his views about the matter; when they came home, they passed the story to Admiral Luís Carrero Blanco, who told Franco.<9>
Diplomats discussed the possibility of Spain as a route to a containment camp for Jewish refugees near Casablanca, but it came to naught due to lack of Free French and British support.<10> Nonetheless, control of the Spanish border with France relaxed somewhat at this time, <11> and thousands of Jews managed to cross into Spain (many by smugglers' routes). Almost all of these survived the war.<12> The American Jewish Joint Distribution Committee operated openly in Barcelona.<13>
Shortly afterwards, Spain began giving citizenship to Sephardic Jews in Greece, Hungary, Bulgaria, and Romania; many Ashkenazic Jews also managed to be included, as did some gentiles. The Spanish head of mission in Budapest, Ángel Sanz Briz, may have saved thousands of Ashkenazim in Hungary by granting them Spanish citizenship, placing them in safe houses, and teaching them minimal Spanish so they could pretend to be Sephardim, at least to someone who did not know Spanish. The Spanish diplomatic corps was performing a balancing act: Alexy conjectures that the number of Jews they took in was limited by how much German hostility they were willing to engender.<14>
Toward the war's end, Sanz Briz had to flee Budapest, leaving these Jews open to arrest and deportation. An Italian diplomat, Giorgio Perlasca, who was himself living under Spanish protection, used forged documents to persuade the Hungarian authorities that he was the new Spanish Ambassador. As such, he continued Spanish protection of Hungarian Jews until the Red Army arrived. <15>
Although Spain effectively undertook more to help Jews escape deportation to the concentration camps than many neutral (Switzerland, Turkey) and Allied countries did,<15><16> there has been debate about Spain's wartime attitude towards refugees. Francoist Spain, despite its aversion to Zionism and "Judeo"-Freemasonry, does not appear to have shared the rabid anti-Semitic ideology promoted by the Nazis. Certainly, about 25,000 to 35,000 refugees, mainly Jews, were allowed to transit through Spain to Portugal and beyond. About 5,000 Jews in occupied Europe benefitted from Spanish protection.
http://en.wikipedia.org/wiki/Spain_in_World_War_II