- The Washington Times - Wednesday, December 15, 2004

TEL AVIV — Israeli defense officials in the United States have been accused by the FBI of industrial espionage, the second spying complaint leveled against Israel in four months, Israel’s Army Radio has reported.

In another sign of stress in bilateral relations, Channel 2 television news reported yesterday that Washington was demanding the resignation of the top official in Israel’s Defense Ministry, Director-General Amos Yaron, for failing to disclose a weapons transaction with China.

Israel’s Defense Ministry denied that its envoys had been accused of industrial espionage, but acknowledged that the Bush administration had complained about overly insistent information-gathering by Israelis at military-equipment exhibitions.

“These are not accusations, but rather claims about ‘aggressive collection,’ ” Rachel Naidek Ashkenazi, a Defense Ministry spokeswoman, told Israeli radio. “And this regards information that isn’t classified.”

But she acknowledged that some of that information still is protected by U.S. officials, creating a gray area that has become the source of friction.

Israelis failed to appreciate that repeating questions about the protected systems would arouse the suspicions of the Americans, Mrs. Naidek Ashkenazi said.

“For us, unclassified is unclassified,” she said. “But if an [Israeli] asks in a different way a second time, it’s like he’s crossed a red line. For us, it’s legitimate. For them, it’s breaking the codes of behavior.”

The Army Radio report said Israeli officials were questioned by FBI agents on several occasions about their behavior. The problem prompted Israel to convene all of its defense envoys in New York earlier this month to discuss new guidelines.

The FBI already is probing suspicions that Pentagon analyst Larry Franklin passed classified information to Israel via the American Israel Public Affairs Committee (AIPAC), a pro-Israel lobby.

The FBI searched AIPAC’s offices earlier this month and served subpoenas as part of an investigation into whether Israel improperly obtained information about Iran. AIPAC has denied any wrongdoing.

The U.S. demand that Israel dismiss its top Defense Ministry bureaucrat stemmed from accusations over a “sensitive” weapons system supplied by Israel to China, Channel 2 television said.

The United States complained that Israel first failed to report that the weapons system had been returned to Israel for more work, Channel 2 said. Then Israel lied about the purpose of the project, saying the equipment was being repaired when it was upgrading the system.

Israeli Deputy Defense Minister Ze’ev Boim denied that the United States had demanded Mr. Yaron’s dismissal, but he did say a dispute had opened between Israel and the United States over the weapons transaction.

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