Despatches: Scandal may finally destroy the fearsome reputation of Israel's secret service

A Mossad agent manufactured false information about Syria for five years, misleading the last three Israeli prime ministers. Patrick Cockburn reports from Jerusalem on the scandal that may finally destroy the reputation of Israel's foreign intelligence service.

In the summer of 1996 Mossad began to report that Syrian forces were massing in southern Lebanon, preparing to launch a lightning strike on the Israeli-occupied Golan Heights.

The attack never came. But Israeli fears created a diplomatic furore at the time. Benjamin Netanyahu, the Israeli prime minister, persuaded President Clinton to ask Syria for an explanation. Damascus came to believe that Israeli alarm was a smokescreen to mask its own aggressive intentions.

President Hosni Mubarak of Egypt told Yitzhak Mordechai, the Israeli defence minister, on a visit to Cairo: "This week President Assad [of Syria] called me at least five times, and told me that you are about to launch a surprise attack on him." Gen Mordechai was cautious about the Mossad reports, but increased the supply of ammunition and equipment to the army.

It now emerges that a Mossad agent had manufactured the information, as he had been doing since before 1993. Israeli censorship has prevented the media revealing the identity of the agent or why he was considered such a reliable source, but for five years he delivered reports exaggerating the Syrian threat posed to Israel.

The news could not have happened at a worse time for Mossad, which means Institute for Intelligence and Special Tasks. Its reputation, aided by Hollywood and thriller writers, was always exaggerated. But in September it suffered its worst and most public disaster since it was founded in 1951. In the Jordanian capital Amman, two agents were captured when they tried to poison an official of Hamas, the Islamic militant organisation. To get them back Israel had to release Sheikh Yassin, the jailed Hamas leader.

The present affair will damage Mossad's reputation even further. The disinformation was distributed by the agency when it was led by Shabtai Shavit and Uzi Arad, now the diplomatic adviser to Mr Netanyahu. At a time when Israeli military intelligence was saying that Syria had made a strategic decision for peace Mossad was claiming the opposite.

What were the motives of the Mossad official in fabricating the information? Israeli commentators suggest he may have come from the ideological right and wanted to sabotage negotiations with Syria. They add he may also have been acting out of greed, suggesting that he was pocketing money intended for a Syrian agent, or a desire to impress his superiors.

The US reportedly wants an explanation from Israel, which has set up its own inquiry into the affair. Politicians and generals are denying that they took wrong decisions based on the false reports. But there is no doubt that the credibility of the agency has been permanently damaged among Israel's political and security decision-makers. "As far as we are concerned `the Syrian mess' is much worse than the [Amman] affair," a Mossad source told the daily Yediot Aharanot. "It is hard to fathom how such a thing could sprout among us."