Prosecutors Charge That Extremists Plotted to Attack Jewish Merchants in N.Y. : Terrorism: Scheme was revealed when alleged co-conspirators were secretly tape-recorded in a car. Diamond district was viewed as a key target.

Plotters who planned to blow up the United Nations and other prominent targets also discussed exploding a powerful bomb in mid-town Manhattan’s crowded diamond district to inflict heavy casualties on Jewish businessmen, federal prosecutors charged Tuesday.

Government lawyers said the scheme was revealed when some of the alleged terrorists were secretly tape-recorded in a car as they scouted potential targets.

“One of the co-conspirators says, ‘This is the heart of Israel here in Manhattan,’ ” Assistant U.S. Atty. Lev L. Dassin told a U.S. magistrate. “One of the co-conspirators says, ‘Boom! Broken windows! Jews in the streets!’ ”

Dassin quoted from the tape at a bail hearing for Amir Abdelghani, a 33-year-old Sudanese immigrant and cabdriver. The prosecutor said the comments were made by one of Abdelghani’s unnamed companions in the car. Magistrate James C. Francis ordered Abdelghani held without bail.

The diamond district, a single block crowded with retail shops and merchants between 5th and 6th avenues, is the center of America’s $5.6-billion trade in gems, where 95% of stones entering the country are sold, cut or polished.

Abdelghani’s lawyer, Lawrence Vogelman, challenged the government’s claims, arguing that his client was entrapped by an informant paid to “create a conspiracy.”

That assertion was echoed Tuesday from the jail cell of Siddig Ibrahim Siddig Ali, another accused terrorist, who has written a lengthy statement accusing FBI informant Emad Ali Salem of “suggesting everything, buying everything, doing everything,” according to his lawyer William Kunstler.

Because of the informant’s close association with Sheik Omar Abdul Rahman, Kunstler said in an interview with The Times, Salem had “enormous prestige” among the “very suggestible young” Arab men. Kunstler said his client and his colleagues “thought Salem was speaking for the sheik.”

“This wasn’t entrapment--it was worse. It was criminal,” Kunstler charged.

The controversial Muslim cleric and opponent of Egypt’s present government is spiritual leader to several suspects arrested both in the alleged plot to commit the latest series of bombings as well to several of those charged in the bombing the World Trade Center on Feb. 26.

Dassin charged that the most recent wave of attacks--whose targets included at least one Hudson River tunnel and the building containing the offices of the FBI--was planned to occur before the end of June, when a lease expired on an alleged bomb-making factory that the accused terrorists used. The prosecutor said media reports that the bombings were scheduled for the Fourth of July were incorrect.

Francis said evidence showed that the defendant was present both for tests of timing devices and during the mixing of explosives.

“The origins of the alleged offense are political,” Francis said. “That cuts the likelihood the defendant would return.”

The magistrate added that the question of entrapment should be raised at trial. But he offered an opinion casting doubt on that defense.

“This is not a situation where a defendant faced with entrapment by a government agent engages in a onetime sporadic criminal act, which cuts across the entrapment defense,” Francis said.

Federal agents said they still are seeking several suspects in the latest bomb plot.

On West 47th Street in the heart of the diamond district, there were no visible signs of increased security Tuesday. The street was clogged with trucks and vans making deliveries as crowds of gem merchants, strollers and shoppers filled the sidewalk.

Also Tuesday, in Harrisburg, Pa., a lawyer for Kelvin Smith, who operates a shooting range in New Bloomfield, Pa., said his client recognized three of the alleged terrorists from the February bombing of the trade center and two others arrested last week in the latest plot.

Attorney Joshua Lock said that Smith, who says he is a Muslim, told federal authorities that Ramzi Ahmed Yousef visited the range at least twice in the first weeks of this year, before he was charged as a trade center suspect. Yousef is still at large and is believed to have fled the country.

Lock said that two suspects in the latest alleged plot--who were not identified--visited Smith’s compound four times after the trade center explosion.

Smith, 39, works as an agent for the federal Fish and Wildlife Service in Harrisburg and also serves as a night security guard and martial arts instructor at a military academy in New Bloomfield.

Several of Smith’s neighbors in New Bloomfield recalled numerous occasions where vans with New York and New Jersey license plates arrived at the shooting range, carrying large groups. They said that Smith and the groups were often seen wearing military camouflage and carrying rifles on their backs as they conducted survivalist-like training late at night in the hilly woods.

Smith, who moved to the area from New York about eight years ago, has denied any involvement in terrorist activities and told reporters that he knew of no illegal acts committed by his visitors.

The FBI conducted searches of his farm Saturday. Lock said that federal agents were drawn to the site after one of the suspects told officials that weapons might be hidden there. But the lawyer said agents found no weapons on Smith’s land.

Smith said he believes the agents came to the compound after he advertised his facility at mosques of fellow Muslims in the New York area.

“It keeps you on your toes,” said Dave Ferrebee, Smith’s next door neighbor, who often has been awakened at 2 a.m. to the sound of rifle fire during night training exercises. “It makes you jumpy.”

Goldman reported from New York and Serrano from Harrisburg. Staff writer William C. Rempel also contributed to this story from New York.