Associated Press, The Jerusalem Post - August 29, 2004

SHARANSKY: PENTAGON-CIA RIVALRY LED TO CHARGE

Allegations of Israeli spying in the United States are false and may be the result of internal conflicts between the Pentagon and the CIA, Diaspora Affairs minister Natan Sharansky said Sunday, but analysts admitted that even so, damage 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 toward Iran. Israel says Iran - and its nuclear ambitions - pose the greatest single threat to the Jewish state.

Sharansky, the first Israeli 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."

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chairman of the parliamentary subcommittee on covert intelligence, said he expected the allegations to be quickly withdrawn.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

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."