Israel's consul general to The Hague was arrested Tuesday evening as he arrived in Israel for a visit on suspicion of accepting bribes.
Officers from Israel Police's International Crimes Unit were waiting for Uriel Yitzhaki as he arrived at Ben-Gurion International Airport from the Netherlands.
The Petah Tikva Magistrate's Court remanded him in custody for six days on Wednesday.
The arrest was the culmination of an extensive investigation into allegations that Yitzhaki, 56, accepted cash and perks in exchange for issuing Israeli passports to people who were not entitled to them.
Details of the investigation were released for publication on Wednesday. A police statement said Yitzhaki had been arrested on suspicion of "accepting bribes, fraud and breach of trust."
The investigation, codenamed "The Flying Dutchman," began in July 2004 when a woman working with Yitzhaki complained that he had tried to use his senior position to force her to have sexual relations with him, Israel Radio reported.
Police detectives have collected evidence apparently showing that Yitzhaki had issued some 150 Israeli passports to people who were not entitled to them in exchange for tens of thousands of dollars and perks such as stays in luxury hotels. The investigation was also a joint effort by the Foreign Ministry and Justice Ministry.
Police are also checking whether Yitzhaki sold Israeli passports during his previous postings to New York, Vienna, Nairobi and Singapore.
Yitzhaki appeared surprised when he was approached by plainclothes detectives at the airport and informed he was under arrest, said Amichai Shai, head of the International Crimes Unit.
Shai told Army Radio that undercover officers investigated Yitzhaki in The Hague, and that his home in the Netherlands was searched as part of the probe. The consulate building in The Hague was also searched, and employees questioned.
"We entered the picture ... in July 2004, when we received initial information from the Foreign Ministry about suspicions that this consul issued passports not in keeping with consular norms and Israeli law," Shai said.
"This was the beginning of an undercover operation that lasted several months, that involved other police forces, including the Dutch one."
The Foreign Ministry has so far refused to comment on the case.
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