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Israel said it will do everything it can to restore diplomatic relations with New Zealand but stopped short of apologising after two alleged Mossad agents were jailed after pleading guilty to belonging to an organised criminal group and attempting to fraudulently obtain a New Zealand passport.
Eli Cara and Urie Kelman, who are widely believed to be Israeli spies, received a six month jail sentence after being caught trying to obtain the false documents using the identity of a wheelchair bound cerebral palsy sufferer.
But three months after Prime Minister Helen Clark asked for an explanation and an apology, she has not received one.
The Israeli Foreign Ministry issued a statement.
"Israel regrets the current state of the traditional and friendly relations between both countries. Israel values its relationship with New Zealand and will do anything it can in order to return those relations to their prior state," the statement said.
The spy scandal was widely reported around the world from Canada to Qatar .
The Sydney Morning Herald is reporting that Australia is stepping up its investigation into Israeli espionage activities following the New Zealand case.
The paper said it is unknown if a raid on a house in Turramurra, NSW was related to the hunt for the alleged Mossad ringleader, Zev William Barkan.
But according to former Mossad chief Danny Yatom, such scandals are no gauge of the agency's real feats.
"Mossad is one of the best intelligence agencies in the world," Yatom said. "Yet even the best agencies are bound to suffer mishaps. Because of the secret nature of intelligence gathering, most... achievements are never made public."
Clark said there were very strong reasons to think Cara, 50, and Kelman, 31, were acting on behalf of Israel's intelligence services. She imposed diplomatic sanctions against Israel and suspended high-level contacts between the two countries.
In the High Court in Auckland, Kelman covered his face with his hand and sat stooped in the dock with his head down for the entire two hour sentencing. The court heard the charges had caused him great distress. His lawyer, Grant Illingworth QC, said the widely publicised allegations that he is a Mossad agent had never formed part of the crown case.
The court heard Kelman is a single man who has a maths and physics degree from the Hebrew University of Jerusalem. Among the many letters of reference was one from a Rabbi of his local synagogue. But Kelman entered New Zealand on a Canadian passport.
For nearly an hour, the court was presented with submissions from Cara's lawyer Stuart Grieve QC, who read out testimonials about his good character. Grieve said there was nothing suspicious about Cara's 24 visits to New Zealand since 2000. Grieve said the suggestion Cara was an Israeli spy, meant there was a real and ongoing risk to him and his family.
While both men admitted the charge, of belonging to an organised criminal group and trying to obtain a false New Zealand passport, they claim their involvement was limited.
Justice Potter said the offending of Cara and Kelman was very serious, and called into question the integrity of the New Zealand passport system. She said it was difficult to know why anyone would want a false New Zealand passport unless it was to be used in a way ancillary to other offending and that offending is likely to be serious or perhaps very serious.
It is believed this is the first time agents of a foreign spy agency have been brought before New Zealand courts since the French bombers of the Rainbow Warrior were deported in 1985.
Both Cara and Kelman will be deported from New Zealand immediately when they are released from jail.
They will be given credit for the two weeks they have already been in custody and should be free in 10 weeks time.
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