UPDATE 1-Yellen: Not legal for U.S. government to seize Russian central bank assets

(Adds quotes, details on sanctions)

By David Lawder

BONN, Germany, May 18 (Reuters) - U.S. Treasury Secretary Janet Yellen said on Wednesday that it would not be legal for the United States to seize frozen Russian central bank assets to help rebuild Ukraine after Russia's invasion ends.

Yellen told reporters ahead of a meeting of G7 finance ministers in Bonn, Germany, that the United States and its allies have blocked an estimated $300 billion of assets from Russia's central bank.

Discussions are just getting started among Western allies on how to finance Ukraine's long-term reconstruction and whether those frozen Russian assets can play a role.

"I think it's very natural that given the enormous destruction in Ukraine, and huge rebuilding costs that they will face, that we will look to Russia to help pay at least a portion of the price that will be involved," Yellen said.

"That said, while we're beginning to look at this, it would not be legal now in the United States for the government to seize those" assets. "It's not something that is legally permissible in the United States." (Reporting by David Lawder and Rami Ayyub Editing by Chizu Nomiyama)