No deal made with Israel, says Clark

12.45pm UPDATE - By STUART DYE

Prime Minister Helen Clark has insisted there has been no discussion or deal struck with the Israeli Government over the Mossad agents jailed yesterday.

She said she expected a formal "government to government" apology or explanation, but maintained she had not yet spoken to her Israeli counterparts.

The Government last night condemned Israel for breaching New Zealand's sovereignty after Uriel Zoshe Kelman and Eli Cara were each sentenced to six months' jail for attempting to fraudulently obtain a passport.

Helen Clark said she had no doubt the men were Israeli government agents and she called on Israel to explain and apologise for its "utterly unacceptable" behaviour.

An apology made by Israeli Foreign Minister Silvan Shalom in a radio broadcast, which did not acknowledge the men were secret agents, was not enough, the Prime Minister said.

However, she added: "The noises coming from Israel at this stage are concilliatory and I would hope so."

Helen Clark also said there had been no contact from other governments around the world but acknowledged they "would be taking a great interest in this".

Helen Clark added: "Since September 11 there's a huge amount of security awareness and the possibility of passport fraud.

"We believe it was important to send a very clear signal that New Zealand will not tolerate it. Those that try to fool us, as these people have, will suffer the consequences."

New Zealand had a very high number of passport applications and that made the country a soft target. The message sent out by the court case was that "we are not".

But she said no special case would be made of the men themselves. "They will be processed as normal by the criminal justice system," she said.

Meanwhile, the Prime Minister said it was not known whether the vandalism of Jewish graves in Wellington was connected to the court case. "But we condemn those actions without reservation," she said.

Earlier she said on National Radio: "The ball is in Israel's court as to where it wants to move from here.

"Three months ago we asked for an apology and an explanation. That has not been forthcoming."

She last night suspended high-level contact with Israel and announced a range of diplomatic sanctions which stopped just short of suspending relations.

She acknowledged today it was possible Israel would wait until the two men had left New Zealand before an apology was offered.

"That is one possible track," she said.

"There might be no response until after the two men have served their sentences."

Israel's acting ambassador in Canberra, Orna Sagiv, continued to insist the men were simply Israeli nationals.

"We fully respect the ruling of the court. Two Israeli citizens faced criminal charges and pleaded guilty to those charges. They will now serve their sentences," she said.

Israeli commentators said the Israeli Government would not acknowledge the men were intelligence agents because that would put their lives at risk.

The New Zealand Government has not offered proof that they are, but Helen Clark has made it clear she has information which leaves her in no doubt.

She has not identified which service they were working for, but she said last night: "We believe we are on very solid ground in saying that they were working on behalf of those agencies."

New Zealand has suspended high-level government contact with Israel, and has delayed approval for the appointment of a new Israeli ambassador.

All Israeli officials who want to visit New Zealand will have to apply for visas and foreign ministry consultations scheduled for later this year have been postponed.

Israel's President Katsov had been expected to visit New Zealand in August, but if an approach about that is made it will be declined.

- NZPA