Israel has completely and totally rejected all allegations that it had implanted a spy in the U.S. government.



Prime Minister Sharon's Bureau issued a statement rejecting contentions in a CBS report that an Israeli spy had infiltrated the Pentagon and passed on classified intelligence information via AIPAC, a pro-Israel lobby group in Washington. CBS reported on Friday night that the Federal Bureau of Investigation had launched a probe into the matter.



The alleged mole is Larry Franklin, a desk official in the Near East and South Asia Bureau of the Defense Department. Franklin worked for U.S. Undersecretary of Defense for Policy Douglas J. Feith, considered to be the third highest-ranking official in the Defense Department. Feith was responsible for the formation of a special intelligence unit before the Iraq war that sought to build the case that Baghdad had ties to Al-Qaeda.



The FBI has stated that arrests could be handed down as early as next week in the matter - but these are not expected to involve espionage, but rather "misuse of government documents" or the like.



The FBI was said to be investigating claims that Franklin, a Christian, influenced U.S. policy towards Iran and Iraq. Israeli analysts are concerned that the case could bolster fringe voices claiming that Israel was behind the U.S. invasion of Iraq, and that the pro-Israel community's "dual loyalties" are once again an issue.



American and Israeli officials denied any Israeli attempts to spy or influence U.S. policy. U.S. Defense Secretary Donald Rumsfeld stated that Franklin was not at a high enough level in order to influence President Bush in matters of foreign policy.



Knesset Member Yuval Shteinitz, Chairman of the Foreign Affairs and Defense Committee in the Israeli Parliament, said yesterday, "Speaking as someone who is completely responsible for the supervision of Israel's secret services, this did not happen and never will. There are no spies in the Pentagon and not in the United States." Dennis Ross, Minister Natan Sharansky and others joined the chorus of those who said that the story is simply not logical, that Israel would not endanger its friendly relations with the U.S. over information that it could receive in many other ways, and that AIPAC was not an intelligence agency.



The Israeli embassy in Washington issued a statement declaring the allegations "completely false and scandalous." AIPAC officials said, "AIPAC is an American organization comprised of proud and loyal American citizens committed to promoting American interests. Any allegation of criminal conduct by the organization or its employees is baseless and false... We take our responsibilities as American citizens seriously. We would not condone or tolerate for a second any violation of U.S. law or interests. We are fully cooperating with the governmental authorities and will continue to do so."