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Acting Foreign Ministry Director-General Ron Prushauer called two senior intelligence officials Friday night: Mossad chief Meir Dagan and Yehiel Horev, the defense establishment's chief of security. Both gave him the same answer: No, we are not involved in the Larry Franklin affair.

Prushauer gave half a sigh of relief: If Dagan and Horev are to be believed, and there is currently no reason not to, then neither the Mossad nor Horev's Malmab unit - which, in its previous incarnation, was responsible for running Jonathan Pollard - is involved in the affair, which threatenes to reawaken all the old demons.

But it was only half a sigh of relief, because the Foreign Ministry's own internal investigation has not yet ended. Thus documents could yet be uncovered for which Franklin served as a source, whether directly or indirectly. Moreover, as the investigation progresses, suspects' confessions or polygraph tests could implicate Israel. In that case, Israel would appear to be a liar, even if its denials now are genuinely based on the best currently available information. And should Israel eventually hand over evidence against Franklin, it would appear to be a double traitor - first against its benefactor, the U.S., and then against its agent.

Finally, even if official Israel proves innocent, the pro-Israel lobby in Washington, AIPAC, has already been hurt.

The importance of the Franklin affair goes far beyond the importance of the information that he allegedly gave to two AIPAC members, who in turn allegedly transmitted it to Israel. The documents, which included a draft decision by President George Bush, were all the type of staff work that is routinely discussed by Israel's diplomatic attaches and U.S. officials. Indeed, getting information from U.S. officials is one of the diplomatic attaches' main jobs.

Mossad representatives and military attaches also maintain ties with American officials. The Military Intelligence representative is responsible for ties with the Defense Intelligence Agency, which is the Defense Department's intelligence arm and Franklin's former employer.

Under certain circumstances, any of the above embassy officials could have had reason to speak with someone working, as Franklin most recently did, for Douglas Feith, the undersecretary of defense for policy.

Feith was one of the leading administration advocates of a tough line on Iran, the war in Iraq and strong support for Israel. Others include Undersecretary of State John Bolton, Vice President Richard Cheney, Cheney's chief of staff, Scooter Libby, and Deputy Secretary of Defense Paul Wolfowitz. This group is opposed on all three issues by the CIA, Secretary of State Colin Powell and other State Department officials.

Thus Israel has been caught in the crossfire of a policy war within the U.S. administration - one unlikely to end even if Bush is reelected in November. Wolfowitz, whom Bush likes, would probably have trouble getting Senate confirmation for a promotion; Feith was considered a leading candidate for ouster even before the Franklin affair; Bolton's status has been undermined; and the entire group viewed Bush's nomination of Porter Goss for CIA director as a blow, as Goss has close ties with the agency and its outgoing head, George Tenet, the group's long-time rival.

Another agency whose battle for survival is liable to hurt Israel, albeit unintentionally, is the FBI, whose signal failure to prevent the September 11, 2001 attacks led both to the creation of the Department of Homeland Security and to calls for removing counterterrorism from the FBI's aegis and transferring it to a new agency, similar to Britain's MI5. The FBI is thus determined to prove to be outstanding at the top two items on its new agenda: preventing terrorism and preventing espionage.

The man who is heading the FBI's investigation against Franklin, Dave Szady, has repeatedly said that he views no person, agency or country as above suspicion. In his view, Israel, along with Taiwan, France, Japan, India and others, is on the list of friendly countries that "nevertheless try to steal our secrets." He once stated in an interview that only the prevention of mass-casualty terror attacks is more important than counterespionage. He added that today, it is not only America's enemies, but also its allies that try to steal its secrets - and while embassies and consulates remain the bases for such activity, he continued, foreign governments today also employ students, scientists and "front" companies.