Intelligence

DATE=8/30/2004

TYPE=CORRESPONDENT REPORT

TITLE= ISRAEL / US SPY (L-O)

NUMBER=2-318592

BYLINE= SONJA PACE

DATELINE= JERUSALEM

CONTENT=

VOICED AT:

HEADLINE: Israeli Diplomat Reported to Have Met American Investigated for Spying

INTRO: Israel insists it is not spying on the United States, despite reports that a Pentagon analyst, under FBI investigation for passing secret information to Israel on Iran, met with a senior Israeli diplomat in Washington. VOA's Sonja Pace reports from Jerusalem.

TEXT: Israeli Foreign Minister Silvan Shalom denied that Israel has done anything wrong. He said relations between the two countries are so close that they routinely share classified information. He said meetings between diplomats and employees of the two governments are not out of the ordinary.

Mr. Shalom's comments follow reports that a senior Israeli diplomat in Washington met with Pentagon analyst, Larry Franklin, who's been the focus of an FBI investigation for possibly passing classified information on Iran on to Israel.

There are also reports that the powerful Israeli lobby group, the American Israel Public Affairs Committee, may have been involved as a conduit. The group has denied any wrongdoing.

Since news of the FBI investigation broke late last week, Israel has been adamant in denying that it spies on its closest ally, the United States. Officials and columnists have instead said this whole story has more to do with domestic U.S. politics during an election year.

Professor Gerald Steinberg of Bar-Ilan University agrees.

/// STEINBERG ACT ///

"Israel has been blamed for helping to prod the Bush administration to be prominent members of the neo-conservative group that led to the war in Iraq. There's a great deal of personal bitterness, political bitterness - and I think what we're seeing, particularly as we're getting close to the U.S. election, is some of that coming out. And that fact that some of the information was leaked to the media also shows that this is perhaps very much a political process."

/// END ACT ///

// OPT // Israeli officials say the FBI probe cannot be taken seriously because Israel learned its lessons about spying on its closest ally in 1985 when naval intelligence analyst Jonathan Pollard was caught spying for Israel.

Yuval Steinetz chairs the Foreign Affairs and Defense Committee in the Israeli parliament.

/// STEINITZ ACT ///

Since (the)Pollard case there was clear and firm decision not to spy against the United States government or in the United States, and therefore, I am 100 percent confident that there is no Israeli involvement in this case.

/// END ACT /// // END OPT //

But some Israeli analysts believe that no matter what the outcome of the FBI investigation may be, the affair could harm Israeli-American relations.

Security analyst, Shlomo Brum, of Tel Aviv's Jaffee Center for Strategic Studies, says no matter what the facts are a certain perception is there.

/// BRUM ACT ///

"It may increase the perception among some people that Israel is misusing its relationship with the USA and that Israel is not a faithful ally, etc. etc."

/// END ACT ///

Israeli analysts do agree that the affair will not hurt bilateral relations in the long-term. (Signed)

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