FBI Investigates/AIPAC Defends/Israel Denies Spying on US
AP Press 8/28/04
FBI Investigates/AIPAC Defends/Israel Denies Spying on US
Sat Aug 28, 2004 17:52

Israel denies allegations it spied against the U.S.

Associated Press Writer

JERUSALEM (AP) -- Israeli officials on Saturday denied allegations the country spied on the United States, saying it halted espionage activities against U.S. targets after a diplomatic scandal nearly 20 years ago.

American law enforcement officials on Friday said the FBI is investigating whether a Pentagon analyst fed Israel secret material about White House deliberations on Iran. Israeli officials widely consider Iran's Islamic government to be the biggest regional threat.

The allegations threaten to create tensions between Israel and its closest ally at a sensitive time. After four years of fighting with the Palestinians, Israel faces growing international isolation and can ill afford a confrontation with Washington.

Prime Minister Ariel Sharon's office issued a statement late Saturday saying that Israel had no connection to the matter.

"Israel does not engage in intelligence activities in the U.S. We deny all these reports,'' the statement said.

Quoting unidentified Israeli sources, the Israeli daily Haaretz reported on its Web site that the Pentagon analyst under suspicion worked regularly with Israeli officials, but that all contacts had followed standard diplomatic procedures.

Israeli security sources said Saturday that the Mossad foreign espionage service, military intelligence and other intelligence branches had all been asked about possible involvement with the Pentagon analyst. All denied any connection to the affair, the sources said, speaking on condition of anonymity.

U.S. officials refused to identify the suspect, but said the person is an analyst in the office of Douglas J. Feith, a senior Pentagon official with close ties to Israel.

In their denials, Israeli officials said the government halted all espionage activities against the United States following the 1985 arrest of American naval analyst Jonathan Pollard for passing on secrets to Israel.

The case continues to cloud intelligence ties between the two countries. Pollard is serving a life sentence in a U.S. federal prison.

"Following the Pollard crisis 20 years ago, there was a decision not to spy against the U.S. government or its subsidiaries, and I am confident that this is still the case,'' said Yuval Steinitz, chairman of parliament's Foreign Affairs and Defense Committee.

Despite Israel's deep concern about Iran's nuclear program, it would not be tempted to break that ban, Steinitz said.

"Israel is very concerned ... that the ayatollahs will acquire nuclear weapons,'' he said. "But if you think this might change our previous decision to spy on the U.S., the answer is no.''

Israeli security officials, speaking on condition of anonymity, said the United States and Israel cooperate closely on Iranian issues, making it unlikely they would need to resort to spying. They did not elaborate.

Since the Sept. 11, 2001, terrorist attacks in the United States, Israeli Prime Minister Ariel Sharon has enjoyed especially close relations with U.S. President George W. Bush.

The American leader has recently signaled that Washington might be prepared to reverse long-standing American policy by recognizing large Israeli settlement blocks in the West Bank.

Bush has also given strong backing to Israeli efforts to block Iran's nuclear development program, lumping Iran together with Saddam Hussein's Iraq and North Korea as part of an international "axis of evil.''

Feith, the No. 3 official in the Pentagon, prepared an important policy paper for former Israeli Prime Minister Benjamin Netanyahu before Netanyahu's election in 1996 and is a former law partner of Marc Zell, an Israeli-American attorney with business interests in Iraq.

The U.S. investigation centers on whether the Pentagon analyst passed secrets about Bush administration policy on Iran to the main pro-Israeli lobbying group in Washington, the American Israel Public Affairs Committee, which then was said to have given the secrets to the Israeli government, one official said.

AIPAC denied the allegations, and David Siegel, spokesman for the Israeli Embassy in Washington called them "completely false and outrageous.''

In recent months, Israeli officials have repeatedly expressed concerns about Iran's nuclear ambitions. Last month, military Chief of Staff Lt. Gen. Moshe Yaalon accused Iran of developing nuclear weapons in violation of promises to the U.N. nuclear watchdog agency.

"We have to pay serious attention to Iran's intention to arm itself with nuclear capabilities. This should not only concern Israel, but all the countries of the free world,'' Yaalon said.

His remarks, along with warnings from other Israeli security officials, have raised fears in Tehran that Israel was contemplating a pre-emptive strike against Iranian facilities, much as it had done in 1981 when its air force bombed an Iraqi nuclear reactor near Baghdad.

Last week, Iran threatened to destroy Israel's Dimona nuclear reactor should the Jewish state attack Iran's nuclear facilities.

AP-ES-08-28-04 1437EDT

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