Israel: Spy Allegations Will Prove False

Allegations of Israeli spying in the United States are false and may be the result of internal conflicts between the Pentagon and the CIA (search), an Israeli Cabinet minister said Sunday, but analysts admitted damage already has been done to crucial ties between the two countries.

American officials said Saturday that the FBI has spent more than a year investigating whether a Pentagon analyst funneled highly classified material to Israel.

The material described White House policy taeli Cabinet minister to speak in public about the matter, told Canadian Broadcasting Corp. television that Israel enforces a ban on spying in the United States.

"I hope it's all a mistake or misunderstanding of some kind, maybe a rivalry between different bodies," he said, singling out "the Pentagon and the CIA."

The U.S. investigation centers on whether a Pentagon analyst passed classified material about Iran to the American Israel Public Affairs Committee (search), the influential main Israeli lobbying organization in Washington, and whether that group in turn passed it on to Israel. Both AIPAC and Israel deny the allegations.

U.S. officials identified the analyst as Larry Franklin (search), an Iran specialist working under Douglas J. Feith, a top Pentagon official with close ties to Israel. Franklin did not respond to a message left at his office.

Sharansky said the ban on espionage in the United States dates to the scandal over Jonathan Pollard, an American Jew caught spying for Israel in 1985. Sharansky, who belongs to Prime Minister Ariel Sharon's (search) ruling Likud Party, said he has "personal experience" with the ban, but he did not elaborate.

"There are absolutely no attempts to involve any member of the Jewish community and any general American citizens to spy for Israel against the United States," he said.

Prime Minister Ariel Sharon's office issued a denial late Saturday, saying "Israel does not engage in intelligence activities in the U.S."

The scandal dominated Israeli news media on Sunday. In numerous interviews, both current and former Israeli intelligence officials said it was highly unlikely that Israel would have to spy on the U.S. government.

Legislator Ehud Yatom, chairman of the parliamentary subcommittee on covert intelligence, said he expected the allegations to be quickly withdrawn.

"I imagine that within a few days the United States will come out with an announcement that Israel has no connection whatsoever with the supposed spy and his activities," he told Israel Radio.

Commentators feared the reports would revive allegations that American Jewish groups may have put Israel's interests above those of the United States, and whether Israel's allies in Washington may have excessive influence over the White House.

"It breathes new life into the assertion that Israeli, and not American, interests led to the war in Iraq," wrote Nathan Guttman in the Haaretz daily. "It revives the old charge that Israel is not an ally but a treacherous country, and the old saw that American Jews have a 'divided loyalty' problem."

Sharansky agreed. "There is no doubt that these publications are damaging, (and) even though they are false, they are damaging," he said.

Eitan Gilboa, professor of political science at Tel Aviv's Bar Ilan University, questioned the timing of the reports. Writing in the Yediot Ahronot daily, he said the reports might be an attempt to embarrass President George W. Bush ahead of the Republican convention and presidential election.

Uzi Arad, a former senior official in the Mossad spy agency, said the allegations were leaked to hurt the pro-Israel lobby in Washington.

"They way it was reported, they pointed out in which office (Franklin) worked," Arad told Israel Radio. "They pointed at people like Doug Feith or other defense officials who have long been under attack within the American bureaucracy."

Feith is an influential aide to Defense Secretary Donald Rumsfeld. His previous work included prewar intelligence on Iraq, including purported ties between Saddam Hussein's regime and al-Qaida terrorism network.