By CLAIRE TREVETT and BRIDGET CARTER
The Prime Minister made a scathing attack on Israel and imposed tough diplomatic sanctions after two alleged Mossad spies were jailed for passport fraud yesterday.
"The New Zealand Government views the act carried out by the Israeli intelligence agents as not only utterly unacceptable but also a breach of New Zealand sovereignty and international law," Helen Clark said.
The sanctions, including suspending all high-level visits to or from Israel, came minutes after Uriel Zoshe Kelman, 31, and Eli Cara, 51, were sentenced to prison for six months for stealing the identity of a tetraplegic man to obtain a false New Zealand passport.
Helen Clark said there were "very strong grounds" to believe the men were acting for Israel's intelligence services.
The case was revealed by the Weekend Herald in April.
Last night Israel's Foreign Minister Silvan Shalom said, "We are sorry about this matter. It will be dealt with and all will be done to restore Israel's long history of good relations with New Zealand to their previous correct ties."
Mr Shalom did not address the claim that the two convicted men were linked to Israel's intelligence services.
In court both men denied having links with spy agencies, such as Mossad.
Helen Clark said: "If one were to lay espionage charges, one would have to be prepared to offer the kind of evidence in court which our intelligence agencies don't like coming forward to display.
"We have very strong grounds for believing these are Israeli intelligence agents."
The sanctions are high on the scale of diplomatic displeasure between Governments, although they avoid targeting the 6000-plus Israeli tourists who visit New Zealand each year.
All Israelis coming to New Zealand on Government business must now obtain visas, Foreign Ministry consultations with Israel have been suspended and the Government has declined an approach for Israel's head of state, President Moshe Katsav, to visit in August.
Helen Clark said the case was a "sorry indictment" on Israel, with which New Zealand had long shared friendly relations.
"We regard it as an unfriendly action by agents of the Government of Israel, aimed at undermining New Zealand's sovereignty and certainly breaching international law.
"While we regret the need for it, New Zealand has no option but to take the actions that it has in response to a deliberate breach of its sovereignty.
"This incident has seriously strained that relationship and it will remain strained for some time."
New Zealand had asked for an explanation and an apology three months ago."We look forward at some point to the Israeli Government swallowing its pride and offering the explanation and apology we have asked for."
Helen Clark ruled out any deals with the Israeli Government similar to the agreement the previous Labour Government reached with France in 1986 over the two French spies who bombed the Greenpeace ship Rainbow Warrior.
The breach has parallels to a row in 1997 between Israel and Canada, which demanded Mossad stop using Canadian passports on covert operations.
Foreign Affairs Minister Phil Goff said: "One of the most damaging things that has been done to Israel is the public exposure of the actions of their intelligence agencies in violating other people's sovereignty in total contradiction of international law."
Mr Goff said the agents were working for Mossad.
"We have no doubt on our side that these were individuals who were not working simply as part of a private criminal organisation. These were people who were doing it on behalf of Israeli intelligence agencies."
The convicted men, who have spent two weeks in prison awaiting sentence, are likely to remain behind bars for a further 10 weeks before being deported.
Israel's acting ambassador in Australia, Orma Sagiv, said she hoped Israel's relationship with New Zealand would not be damaged long-term.
The affair began after a tip-off to police from Internal Affairs over an application for a New Zealand passport by an Israeli, Zev William Barkan, 37, who has now fled the country.
Barkan took the identity of a man around the same age, who had cerebral palsy, in applying for a New Zealand passport. Investigating Barkan, a covert police operation discovered Cara and Kelman near drop-off points for the couriered passport.