LONDON - Foreign Minister Avigdor Lieberman said Israel "regretted" Britain's decision yesterday to expel an Israeli diplomat over the alleged use of forged British passports by suspected killers of a Hamas commander in Dubai.

"We attribute great importance to our relations with Britain," Lieberman said in a statement from Brussels, where he was meeting with senior European Union officials. "We hold a number of different and sensitive dialogues with them, and regret the British decision. We have never been given proof that Israel was involved in this affair."

Officials in Jerusalem expressed disappointment with Britain's public response to the matter, with some saying off the record that they saw it as a negative step in the war on terror.

Britain accuses Israel of being involved in the assassination of Hamas arms dealer Mahmoud al-Mabhouh in Dubai in January.

British Foreign Secretary David Miliband went before parliament to announce that the five week investigation by the Serious and Organized Crime Squad into the use of 12 forged British passports had concluded with the finger pointed squarely at Israel. There would be immediate and serious repercussions, he said.

According to several sources, the expelled member was the unassuming head of the Mossad agency in London, who was given two weeks to pack up, take his children out of school, and leave the country.

Fallout from the affair also continued as the British Foreign Office issued a travel advisory to citizens traveling to Israel and the Palestinian territories yesterday.

Citing "circumstantial evidence of Israeli involvement in the fraudulent use of British passports," the foreign office warned on its Web site of the "possibility that your passport details could be captured for improper uses while your passport is out of your control."

"The risk applies in particular to passports without biometric security features," the warning on the Web site read. "We recommend that you only hand your passport over to third parties including Israeli officials when absolutely necessary."

Even before Britain's decision to expel the Israeli diplomat, yesterday was meant to be an historic occasion in British-Israeli ambassadorial circles as the newly refurbished Israeli Embassy in London was opened.

"It has been a little more historical, and hysterical, than we would have chosen," said Ron Prosor, Israel's ambassador to Britain, at a housewarming party at the embassy yesterday.

Indeed. Only a few hours earlier Miliband, the expected guest of honor at the embassy event, meticulously planned months ago, announced he would not be attending.

The embassy event was abuzz with the fresh news as well heeled guests - prominent members of the Jewish British community, Israelis, and the diplomatic corps - snacked on sushi and fancy duck crepes, and speculated on what steps Israel might now take in response.

Possibly hoping to calm the waters, Miliband, speaking later in the evening, stressed that this had not been an expulsion per se, but a request.

"He has been asked to leave which is not the same as being expelled," the Minister told the Foreign Press Association. "We asked - and the embassy agreed."

The timing of the British announcement came, according to sources, as a surprise to the Prosor, who was urgently called out of a formal lunch Monday with visiting Jerusalem Mayor Nir Barkat and high level guests, to attend to the matter.

"It takes a lot to rile me," Prosor half kidded with a young member of the British Foreign Ministry present at the housewarming, "but you are definitely doing your best."

Making a joke about the age of the carpets that were replaced by the embassy as part of the refurbishment event, Prosor further quipped, "Talking of carpets, we can't just sweep today's events under the rug."

"Like any worthwhile friendship, the friendship between Britain and Israel has had its ups and downs. Today, we are experiencing both in one day," he said, noting that this year the two nations would celebrate 60 years of formal diplomatic relations. "The path of true friendship doesn't always run smooth. Today, we face new challenges, which must be overcome together."

The British government, according to Miliband, is in touch with all the countries whose nationals were effected by this affair - France, Australia, Germany and Ireland - and all are conducting their own investigations.