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WELLINGTON - New Zealand Prime Minister Helen Clark announced Sunday that Israel had made a formal apology for sending two agents into the country last year to try to obtain a false passport.

Normal relations between the two countries, suspended last July in retaliation for what New Zealand called an unfriendly act by a friendly country, are being resumed immediately, Clark said.

Israeli spies had fraudulently obtained a "very small number" of New Zealand passports, Clark revealed Sunday.

She said it was learned that passports had been obtained by people working on behalf of Israeli intelligence during investigations into the arrest of two Mossad secret service agents as they tried to get another one last year.

The passports had been cancelled and "it would be futile for attempts to be made to use them," Clark said.

The diplomatic rift flared up in March 2004 when two Israelis, Eli Cara and Uri Kelman, believed to be agents of the Mossad secret service, were arrested for attempting to obtain a New Zealand passport by fraudulently stealing the identify of a quadriplegic man.

They were convicted in July and jailed for six months, but were released and deported in September after making substantial charitable contributions.

The New Zealand government suspended all high level contacts with Israel pending a formal apology and barred President Moshe Katsav and Deputy Chief of Staff Major-General Gabi Ashkenazi from making visits earlier this year.

"The Israeli letter of apology, signed by Foreign Minister Silvan Shalom, states that Israel apologizes for the involvement of its two citizens in the activities which led to their arrest and convictions in New Zealand," Clark said.

"It further states that Israel regrets these activities and commits itself to taking steps to prevent a recurrence of similar incidents in future."

She said New Zealand agreed to resume full ties following the letter of apology after consultations between the two governments carried out through diplomatic channels over recent months.

A new Israeli ambassador to New Zealand, whose accreditation had been held up by the dispute, will now be welcomed and visits and other diplomatic activities can be restored, Clark said.

She said the government had been strengthening the processes used to issue passports for some time.

Commentators said New Zealand passports had been sought by Israeli agents because it was seen as a neutral country and holders of the documents could move easily over international borders.