Hezbollah has partially unraveled the CIA's spy network in Lebanon, severely damaging the intelligence agency's ability to gather vital information on the terrorist group at a tense time in the region, former and current U.S. officials said.
In recent months, officials said, Hezbollah has captured several foreign spies working for the CIA.
The CIA's operations in Lebanon took the blow after top agency managers were alerted last year to be especially careful handling informants in the Middle Eastern country.
Hezbollah's longtime leader, Sheik Hassan Nasrallah, boasted in June on television that he had unmasked at least two CIA spies who infiltrated the ranks of the organization, which the U.S. considers a terrorist group closely allied with Iran.
Though the U.S. Embassy in Lebanon officially denied the accusation, U.S. officials concede that Mr. Nasrallah wasn't lying and the damage spread like a virus as Hezbollah methodically picked off the CIA's informants.
These shadowy spy wars are extremely risky business, and people do get killed.
But the damage to the agency's network in Lebanon has been greater than usual, several former and current U.S. officials said, speaking on the condition of anonymity because they were not authorized to speak publicly about security matters.
The Lebanon crisis is the latest mishap involving CIA counterintelligence, defined as the undermining or manipulating of the enemy's ability to gather information.
Former CIA officials have said the once-essential skill has been eroded as the agency shifted from outmaneuvering rival spy agencies to fighting terrorists. In the rush for immediate results, former officers say, tradecraft has suffered.
The most recent high-profile example was the suicide bomber who posed as an informant and killed seven CIA employees and wounded six others in Khost, Afghanistan, in December 2009.
As CIA director last year, Leon E. Panetta said the agency had to maintain "a greater awareness of counterintelligence."
But eight months later, Mr. Nasrallah let the world know that he had bested the CIA, demonstrating that the agency still struggles with this critical aspect of spying and sending a message to those who would betray Hezbollah.
It remains unclear whether anyone has been or will be held responsible in the wake of this counterintelligence disaster or whether the incident will affect the CIA's ability to recruit assets in Lebanon.
CIA officials were warned that their spies in Lebanon were vulnerable. Those told include the chief of the unit that supervises Hezbollah operations from CIA headquarters in Langley, Va., and the head of counterintelligence.
Former and current intelligence officials are waiting to see how CIA Director David H. Petraeus, the retired four-star general who took the helm in September, will handle this fiasco.
While in the military, Mr. Petraeus developed a reputation for exacting standards and holding people accountable.
"Gen. Petraeus will definitely take care of the failings of his organization. He will deal with it head on and not try to bury it under the carpet," said retired Army Col. Peter Mansoor, the general's former executive officer in Iraq.
In response to the AP's questions about what happened in Lebanon, a U.S. official said Hezbollah is a complicated enemy, responsible for killing more Americans than any other terrorist group before September 2001.
The agency did not underestimate the organization, the official said.
The CIA's toughest adversaries, such as Hezbollah and Iran, have been improving their ability for years to hunt spies by relying on patience and guile to exploit counterintelligence holes.
In 2007, for instance, when Ali-Reza Asgari, a brigadier general in the Islamic Revolutionary Guards Corps of Iran, disappeared in Turkey, it was assumed that he was either killed or defected.
In response, the Iranian government began a painstaking review of foreign travel by its citizens, particularly to places such as Turkey where Iranians don't need a visa and could meet with foreign intelligence services.
It didn't take long, a Western intelligence official told the AP, before the U.S., Britain and Israel began losing contact with some of their Iranian spies.
In this instance, the Iranians used travel and expense records to figure out who was selling the foreign intelligence services information about its nuclear program.
The State Department last year described Hezbollah as "the most technically capable terrorist group in the world," and the Defense Department estimates it receives between $100 million and $200 million per year in funding from Iran.