Alleged Hezbollah plot in Azerbaijan

It happened in Baku, transforming the capital of Azerbaijan into a battleground in a global shadow war.

Police intercepted a fleeing car and captured two suspected Hezbollah militants from Lebanon. The car contained explosives, binoculars, cameras, pistols with silencers and reconnaissance photos. Raiding alleged safe houses, police foiled what authorities say was a plot to blow up the Israeli Embassy in Azerbaijan, a former Soviet republic that borders Iran.

Western anti-terrorism officials say the arrests a year ago thwarted swift retaliation by Hezbollah and Iran for the slaying of Imad Mughniyah, the legendary warlord of the Shiite Muslim militia based in Lebanon whose death was widely blamed on Israel.

The prosecution remained largely a secret until this week, when closed court proceedings began for two Lebanese and four Azeris charged with terrorism, espionage and other crimes.

The case offers an inside look at one of the stealthy duels being fought by Israel on one side and Hezbollah and Iran on the other in remote locales, from Latin America to Central Asia.

"They had reached the stage where they had a network in place to do an operation," said an Israeli security official, who requested anonymity for safety reasons. "We are seeing it all over the world. They are working very hard at it."

Hezbollah steadfastly denies that it conducts armed activity outside Lebanon, the base for its military, political and social service wings. Iran rejects allegations that it sponsors terrorism. Both, however, have sworn to avenge the death in February 2008 of Mughniyah, one of the world's most-wanted terrorist suspects and the longtime nexus between Tehran and Beirut.

His assassination by car bomb in Damascus, Syria, which Hezbollah blamed on Israel, spurred into action a secret apparatus teaming Iranian intelligence with Hezbollah's external operations unit, say European, Israeli and U.S. officials.

That alleged alliance is accused in the bombings in Argentina of the Israeli Embassy in 1992 and a Jewish community center in 1994, attacks that left 114 people dead. Both were allegedly the work of Hezbollah suicide bombers directed by Iranian spies in response to Israel's assassination of Hezbollah leaders.

"In Buenos Aires in 1992, the attack came a month after an assassination in Lebanon," said Magnus Ranstorp, a top expert on Hezbollah at the Swedish National Defense College. "They strike where they have infrastructure, a network, a target in place."

The choice of Baku last year reflects Iran's influence, said Matthew Levitt, a former intelligence chief at the U.S. Treasury Department. He described the alleged plot as "in the advanced stages."

"The Iranians have a history of a presence there," said Levitt, who is now at the Washington Institute for Near East Policy. "And they wouldn't mind undermining the country, given Azerbaijan's Western leanings."

Azerbaijan, a moderate Muslim nation of 8 million, finds itself in a delicate spot. It has strong commercial and diplomatic ties to Iran, on its southern border. About a quarter of Iran's population, including supreme leader Ayatollah Ali Khamenei, are ethnic Azeris.

At the same time, the Azerbaijani government has a good relationship with Israel and Western nations, which have helped develop an oil pipeline originating in Azerbaijan and running through Georgia to the Turkish port of Ceyhan.

Baku has accused Tehran of interfering in its affairs. In 2006, 15 Azeris were charged with plotting violence against Israelis and Westerners with training and direction from Iranian security forces.

That case resulted in surveillance that contributed to the discovery of last year's plot, Western anti-terrorism officials say. In early 2008, security forces detected contact between local militants and two Hezbollah operatives, said Western officials familiar with the investigation.

The Lebanese suspects on trial are Ali Karaki, whom anti-terrorism officials describe as a veteran of Hezbollah's external operations unit, and Ali Najem Aladine, described as a lower-ranking explosives expert.

The duo allegedly traveled back and forth from Baku to Iran and Lebanon in early 2008. They used Iranian passports, stayed in luxury hotels and led a cell that laid the groundwork for an attack, anti-terrorism officials say.

The cell allegedly conducted reconnaissance on the Israeli Embassy, which is housed in the Hyatt Tower high-rise complex along with the Thai and Japanese embassies. The group cased other targets, developing plans to bomb a radar tower, prosecutors say.

The Azerbaijani investigation concluded that the suspects intended to array three or four car bombs around the embassy and set them off simultaneously. The group had hundreds of pounds of explosives, allegedly supplied by Iranian spies, and intended to accumulate more, said the officials familiar with the investigation.

Investigators believe that a bombing was weeks away when the suspects spotted the surveillance in early May 2008. Police moved in, but a number of Lebanese, Iranian and Azerbaijani suspects escaped by car into Iran, anti-terrorism officials assert.

The court charges in Baku are consistent with information gathered by Israel about the alleged plot, another Israeli official said, declining to comment on details.

In conversations with Azerbaijani authorities, Iranian representatives denied any role, Western anti-terrorism officials said. But at a preliminary hearing in Baku this week, charges against the six suspects included the allegation that they had ties to Iran's Revolutionary Guard, the elite force that is said to work closely with Hezbollah.

The investigation implicated senior officers of the Revolutionary Guard in the plot, the anti-terrorism officials say. Karaki identified a Revolutionary Guard official named Fadhli as his contact in Iran and described bringing militants to Iran for training, officials say.

Some experts believe that an attack remains inevitable because of Mughniyah's importance to both Hezbollah and Iran. The risk is greatest for Israeli and Jewish targets in U.S.-allied Arab nations, Latin America, Central Asia and Africa, the Israeli security official said.

As Hezbollah runs a strong campaign for the June 7 elections in Lebanon, tensions have flared with arrests of an alleged Hezbollah cell in Egypt and of suspected Israeli spies in Lebanon. Hezbollah warned recently that Israel is preparing to kill Sheik Hassan Nasrallah, the organization's secretary-general.

The loss of Mughniyah's expertise damaged Hezbollah's ability to pull off the kind of attack that would match his dramatic demise, Israeli officials say.

But the militant group may also be biding its time, Ranstorp said: "Hezbollah has said it will decide on its own timetable what to do."

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