Israel Apologizes to U.S. in Spy Case : Says Intelligence Unit, if Involved, Will Be Dissolved

The Israeli government issued a qualified apology to the United States over the Pollard spy affair Sunday and promised that if a continuing inquiry into the matter confirms that an Israeli intelligence unit played a role, “the unit involved in this activity will be completely and permanently dismantled.”

The government added that it is pursuing the inquiry vigorously and that it is determined to uncover “all the facts to the last detail, no matter where the trail may lead.”

The statement, read to reporters by Cabinet Secretary Yossi Beilin during a break in the regular ministers’ meeting, fell short of an unequivocal admission of Israeli responsibility and appeared to reflect conflicting pressures placed on the political leadership by what Beilin termed “the alleged spy case.”

Damage to U.S. Ties

On one hand, the government is worried about the damage the accusations against Jonathan J. Pollard are causing to its relations with the Reagan Administration, Congress and the American public--damage that, given Israel’s political and economic reliance on the United States, could have extremely serious consequences.

On the other hand, it seems clear that any full disclosure would reach the nation’s top officials and have unforeseeable implications for the future of the government. Senior Israeli sources said that the key question now is how Washington receives Sunday’s statement, which was Israel’s first official comment on the incident in a week.

On Friday, the State Department said it was “dismayed that the government of Israel was not as forthcoming as we would have hoped and expected.”

On Sunday, however, Secretary of State George P. Shultz and other U.S. officials welcomed the latest Israeli announcement. The Israeli sources were clearly pleased by this U.S. reaction and hopeful, as one put it, that “people will now forget” about the affair.

Israel radio reported that Sunday’s government statement was prepared by Peres in consultation with Rabin, Foreign Minister Yitzhak Shamir and representatives of Israel’s intelligence services.

The statement made no mention of two key Washington demands--return of any stolen documents now in Israeli possession and access to Israeli diplomats involved in the affair. A senior Israeli source said that both those issues are “still being discussed between the two governments.”

Two Israeli science attaches said to have been Pollard’s contacts were recalled from the United States soon after the intelligence analyst was arrested outside the Israeli Embassy in Washington on Nov. 21. According to the FBI, Pollard has confessed to receiving $2,500 a month in return for secret defense documents he passed to Israeli officials.

“The government of Israel assures the government of the United States that in the wake of the inquiry, if the allegations are confirmed, those responsible will be brought to account,” Sunday’s statement said.

“The unit involved in this activity will be completely and permanently dismantled,” it continued.

Israel stressed that “the relations with the United States are based on solid foundations of deep friendship, close affinity and mutual trust. Spying on the United States stands in total contradiction to our policy. Such activity, to the extent that it did take place, is wrong, and the government of Israel apologizes.”

While no more details about the government “unit” involved in the case were released officially, the Los Angeles Times reported Friday that behind the Pollard affair is a little-known Israeli intelligence operation serving the Defense Ministry. The group exists outside the traditional intelligence community here and functions particularly to gather scientific and technical information.

Known by its Hebrew acronym as LEKEM, the operation is headed by Rafael Eitan, a famous career agent in the Mossad, the Israeli equivalent of the CIA.

Without naming Eitan directly, the Jerusalem Post reported this morning that Israel has quietly agreed to allow U.S. investigators to question “the head of the unit.” The concession was said to be part of a scenario, including Sunday’s apology, worked out between the two governments to end the affair.

Eitan has been variously identified in the Israeli press as the man who recruited Pollard and as his ultimate control agent.

Eitan has powerful friends both in the Israeli intelligence community and in the political leadership, and sources here said Sunday that both have rallied around him. Also, since he has served ministers from both major parties--which are now united in a fragile “national unity” coalition--no one seems eager to move strongly against him.

Based on details of the Pollard affair that have emerged, the key to Eitan’s role is that he wore two hats in the rightist Likud Bloc governments that preceded the national unity coalition. Appointed by now-retired Prime Minister Menachem Begin as his counterterrorism adviser in July, 1978, Eitan continued in that post through the term of Begin’s successor, Yitzhak Shamir. But during that time he was also asked to take on the LEKEM job.

When Peres, head of the centrist Labor Alignment, took over the prime minister’s post 14 months ago, Eitan was replaced as counterterrorism adviser. But LEKEM had become a valuable annex to the intelligence community, and he was retained in that job, where he is said to have funneled intelligence reports to Defense Minister Rabin, a Labor Party leader.

Eitan thus links each of the top three men indirectly to the Pollard affair: The Navy analyst was reportedly recruited by Eitan in the spring of 1984, while Shamir was still prime minister; Peres kept him on, and his intelligence reports went to Rabin.

In its only previous statement on the case a week ago, the government said “Israel’s political leadership received with shock and consternation” the reports of Pollard’s spying--a statement that officials later stressed was intended to deny any high-level political involvement in the affair.

And no evidence has emerged here that any Cabinet-level official was aware that Pollard was among Eitan’s sources of information. Nonetheless, their organizational links to LEKEM expose all three leaders to potential charges of dereliction of duty.

Times staff writers Doyle McManus in the Cayman Islands and Don Shannon in Washington contributed to this article.