Israel denies deal to free Iranian Jews involves old debt

Thursday, July 22, 1999

TEL AVIV -- Israel on Wednesday denied a report that Iran has offered a deal to release 13 Jews suspected of espionage in exchange for settling a debt of several billion dollars to Tehran dating back to the shah's reign.

Government leaders either denied the report in the Yediot Aharonot daily or pleaded ignorance.

"I don't know a thing about this," Prime Minister Ehud Barak told reporters in London.

"These are rumors," Foreign Minister David Levy said in Jerusalem.

Earlier, the Israeli newspaper the government rejected the Iranian offer because of Tehran's precondition. Yediot said the offer was relayed through so-called mediators.

The newspaper said Iran claims Israel owes several billion dollars from the rule of Shah Reza Palavi, ousted in 1979 and replaced by the Islamic regime.

Diplomatic sources confirmed that American Jewish leaders have launched an effort to free the Jews and that Teheran has raised the debt question.

Israeli diplomats said they have been told to reject any Iranian offer that links the release of the Jewish suspects to bilateral issues with Teheran. The newspaper said American Jewish leaders have been holding quiet contacts with Teheran for the release of the Jews.

The newspaper also reported that over the last few days Iranian authorities have seized the passports of several Jews in Iran.