Pentagon official investigated for leaking classified material on US policy to Israel

In an espionage investigation that could strain US-Israeli relations and muddy the Bush administration's Middle East policy, the FBI is investigating whether a Pentagon analyst fed to Israel secret materials about White House deliberations on Iran.

In an espionage investigation that could strain US-Israeli relations and muddy the Bush administration's Middle East policy, the FBI is investigating whether a Pentagon analyst fed to Israel secret materials about White House deliberations on Iran.

Charges, which may include that of espionage, could be brought in the case as early as this week, said two federal law enforcement officials speaking on condition of anonymity. The case had taken so long in part because of diplomatic sensitivities between the US and its close ally Israel, they said.

The information involved is said to be highly classified material on Bush administration policy toward Iran. Officials said the still-classified material did not discuss US military or intelligence operations and was not the type that would endanger the lives of US spies overseas or betray sensitive methods of intelligence collection. The target of the inquiry was identified by the two officials as Larry Franklin, a senior analyst in a Pentagon office dealing with Middle East affairs. Mr Franklin, who did not respond to a telephone message left at his office on Saturday, formerly worked for the Defence Intelligence Agency.

In an earlier statement, the Defence Department, without saying he was under investigation, described Mr Franklin as being at the "desk officer level, who was not in a position to have significant influence over US policy. Nor could a foreign power be in a position to influence US policy through this individual."

Mr Franklin works in an office overseen by Douglas J Feith, the defence undersecretary for policy. Mr Feith is an influential aide to Donald Rumsfeld, the Defence Secretary, whose previous work included pre-war intelligence on Iraq, including purported ties between Saddam Hussein's regime and al-Qa'ida.

In August 2003, Mr Franklin and a Pentagon colleague were in the news after it was disclosed they had met two years earlier with Manuchar Ghorbanifar. He was among the Iranians who suggested to the Reagan administration in the 1980s that profits from arms-for-hostages deals be funnelled into covert arms shipments to US-backed Contra rebels battling the Nicaraguan government.

The investigation centres on whether Mr Franklin passed classified US material on Iran to the American Israel Public Affairs Committee, the highly influential main Israeli lobbying organisation in Washington, and whether that group passed them on to Israel. AIPAC and Israel deny the allegations.

The US law enforcement officials stressed that the investigation is not complete and that others could be implicated. They would not comment on whether that might include officials at AIPAC, which said it has been co-operating in the investigation. "Any allegation of criminal conduct by AIPAC or its employees is false and baseless," AIPAC said.

Ariel Sharon's office denied the claims. "They are completely false and outrageous," a spokesman said. A senior official was confident that the affair would blow over within days once the facts came out. "We're not involved in this," he told The Independent on Sunday. "Israel has no connection with it."

The US has strongly backed Israeli efforts to block nuclear development in Iran, with President George Bush including Iran with Iraq and North Korea as part of an international "axis of evil".

Yet his administration has battled internally over how hard a line to take towards Iran. The State Department has advocated more moderate positions, while more conservative officials in the Department of Defence and some at the White House's National Security Council have advocated tougher policies.

Mr Sharon's government has pushed the Bush administration to be tougher on Iran, expressing concerns about Iran's nuclear ambitions. Last week, Iran threatened to destroy Israel's Dimona nuclear reactor if Israel attacks Iran's nuclear facilities.