CANBERRA, Oct 8 (Reuters) - An 88-year-old Australian man, listed in the top ten of most-wanted war criminals compiled by the Simon Wiesenthal Center, is eligible for extradition to Hungary, an Australian court ruled on Thursday.

Charles Zentai was arrested in July 2005 accused of taking part in the fatal beating in 1944 of Jewish teenager Peter Balazs in Budapest.

At the time, Zentai was a 23-year-old warrant officer in the pro-Nazi Hungarian military, but argues he left Budapest with his regiment the day before the murder, on Nov. 8, 1944.

Australia's Federal Court on Thursday backed an earlier magistrate's decision that Zentai was eligible for extradition, but granted a 14-day extension to allow his lawyers to appeal.

"We're leaving all options open at the moment, because we haven't read the full extent of the judgment. There may be things in there that are worth pursuing," Zentai's son, Ernie Steiner, told reporters outside the court.

"Obviously I am very concerned for my father. He wasn't even there. So this is really a travesty."

Zentai, who turned 88 on Thursday, moved to Perth after the war and became an Australian citizen.

"Karoly" Zentai is listed by the Nazi-hunting Simon Wiesenthal Center at number seven of the top ten war criminals still at large, and is accused of taking part in "manhunts, persecution, deportation and murder of Jews".

Balazs, 18, was travelling on a tram when he was detained for not wearing the yellow Star of David. He was tortured and killed in an army barracks and his body dumped in the Danube River.

Zentai, a retired mental health nurse, has argued he would not survive extradition due to a heart condition requiring specialist care.

Australia's Home Affairs Minister Brendan O'Connor will have the final say on Zentai's extradition.

(Reporting by Rob Taylor; Editing by Nick Macfie)

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