Gideon's Spies: The Secret History of the Mossad

CHAPTER 27 A SECRET CHANNEL AND HEZBOLLAH ROCKETS

On a cool morning in February 2006, eight middle-aged men were allowed to bypass the stringent security checks at Ben Gurion International Airport outside Tel Aviv. Four were Israelis, casually dressed. The Arabs wore dark suits and neatly knotted neckties. Little known outside their communities, the group had been given a pivotal role on the seesaw of Middle East politics. The Arabs were senior members of Fatah and were led by Jibril Rajoud, the party’s hard line national security adviser. The Israeli quartet was headed by Uri Saguy, a trim, quiet-spoken man who had once been head of Israeli army intelligence.

Only Meir Dagan and Ehud Olmert, soon to be prime minister of Israel, and the Palestinian Authority president, Mahmoud Abbas, knew the purpose of the trip was to establish a “back door channel” between Israel and Fatah that would effectively sidetrack Hamas’s overwhelming political dominance over the Palestinian parliament.

And, not for the first time, President George W. Bush had personally approved this secret intervention in the affairs of an elected government.

Each man carried a bulging briefcase which contained the details of their secret mission. Success would have a dramatic effect on Israel’s relationship with Hamas and the new generation of Middle East political leaders. The men about to board the plane for their long flight to Houston, Texas, knew that any of those leaders would block what they hoped to achieve.

One leader was Bashar al-Assad, at thirty-four-years-old, the president of Syria for the past six years. He came to office after his elder brother, Basil al-Assad, had been groomed by their father, Hafez al-Assad, the country’s long-serving tyrant, to take over. When Hafez died in June 2002, it should have been Basil who became president leaving Bashar to pursue his career as a London-trained eye surgeon where he had received his degree and met his wife. But one foggy night in January 1994, Basil crashed his Mercedes outside Damascus with fatal consequences and Bashar found himself lined up by his father to ensure the Assad dynasty continued.

Mossad analysts decided he could become one of the “potentially more open and progressive Arab leaders who might rule with a broader vision of the world.” That hope steadily faded. On foreign policy issues above all, in his determination to cast Syria as the Arab champion of resistance to American and Israeli dominance, Bashar al-Assad had, in Meir Dagan’s words, “clearly shown he has his father’s political DNA.” Bashar al-Assad had, it was broadly assumed, approved the Syrian-inspired assassination of the former Lebanese leader, Rafiq Hariri. The murder led to violence in Beirut and had forced Bashar to pull Syria’s troops out of Lebanon. In a defiant speech in Damascus, the president made it clear the withdrawal was not permanent. His other ambition was to reoccupy the Golan Heights.

The men on the plane suspected Iran’s president Ahmadinejad would have no hesitation in dispatching one of his death squads to murder the Fatah delegation as further proof he would do anything to ensure he remained on track for achieving his aim to “wipe Israel from the face of the earth.” The Fatah quartet had taken great care to ensure that Hamas’s volatile leader in Gaza, Mahmoud Zahhar, was unaware of what was afoot. The day before, each man had slipped quietly out of Gaza and through Ezez, the main Israeli checkpoint crossing from the Gaza Strip into Israel. Behind them they left men who smoked the shisha pipe, the water pipe smoked throughout the Middle East, and listened to the recordings of Umm Kulthoum, the region’s iconic female Arab vocalist, and dreamed of the destruction of the Jewish state. Encouraged by the Hamas election victory, it had become a living, vibrant hope.

The Fatah group had been brought to Ben Gurion airport in a taxi provided by the Israeli government, who were aware there was also one other powerful group who would violently oppose what they hoped to achieve with that “back door channel.” It was Hezbollah. The organization represented the divide between two great branches of Islam that stretches back to the early history of the religion. While the Sunnis were the major branch throughout most of the Islamic world, the Shias had a larger number of followers in Iraq and south Lebanon and were dominant in Iran.

The division extended to the terror organizations. Osama bin Laden is a Sunni, al-Qaeda is predominantly Sunni and continues to be financed by Saudi Arabia, which is a Sunni society. Hezbollah is a Shia organization, which relies heavily on organizational support from Iran, who continues to supply it weapons. In the wake of Hamas’s political victory, Iran had further fostered its common cause against Israel with Hezbollah. While Jibril Rajoud was secretly meeting with Uri Saguy in safe houses provided by Mossad, Mahmoud Zahhar met with Hezbollah’s leader in Lebanon, Hassan Nasrallah, the chief power-broker of the 1.4 million Shia community in the country. Intelligent, charismatic, and a born street orator, Nasrallah’s entire career had been shaped by Israel’s repeated interventions in Lebanon from the civil war in the mid-1970s to when the Israeli Defense Force had unilaterally withdrawn from southern Lebanon after years of failing to subdue Hezbollah.

Just as his brother’s death had led to Bashar al-Assad becoming Syria’s president, it was an assassination that had paved the way for Nasrallah’s rise to absolute power. In 1992 an Israeli gunship killed Nasrallah’s mentor, his predecessor Abbas Moussawi. Since then Nasrallah has survived similar attempts by Mossad to kill him with explosives planted in both his home and his office in Beirut. Each failure to assassinate him has enhanced his status across the Arab world. Feted in Damascus and Tehran by its leaders, his photograph was displayed in the teeming streets as an example “of being able to take the blows dished out by Israel and remain standing” (he told the author).

Born in August 1960, the eldest of nine children, Nasrallah aspired to be a cleric from an early age. In his teens he was sent to the great Shia theological center in Najaf in Iraq. During his two-year study he met Moussawi and became an early disciple. He returned to Lebanon during the Israeli invasion of the country in 1982 and became a commander in Hezbollah. He showed an aptitude for military tactics, which went with his by now well-honed political skills. When Israel withdrew in May 2002, Nasrallah was by then firmly established as Hezbollah’s leader and was hailed in the Muslim world as the Arab warlord who had triumphed over Israel. In 2005, he orchestrated Hezbollah gaining twenty-nine seats in the Lebanese parliament following the departure of Syrian troops twenty-nine years after they had first arrived in the country.

Tehran launched a propaganda campaign to make him a living legend. Feature films, television “documentaries,” and books were devoted with one simple message: while secular ideologies, from pan-Arabism to Arab socialism, had failed to liberate an inch of Arab territory, Islamism — in its Iranian Khomeinist version — working through Hezbollah, had achieved “total victory” over Israel in Lebanon.

Now, on that February day in 2006, Hezbollah, working with Hamas, was preparing to launch an even greater assault on the Jewish state. For the eight men ensconced in their first class seats on the way to Houston, the hope was that they could thwart that attack.

The seating arrangement on the plane was a reminder of the deep divisions that divided their people and why they had agreed to make their long flight to Houston. The four Israelis sat on one side of the cabin, the Fatah group on the other. During meals and visits to the bathroom, they exchanged little more than polite conversation. But for the most part, they either dozed or studied the documents in their briefcases.

During the past weeks there had been discreet contacts with Edward P. Djerejian, the sixty-five year-old former United States ambassador to Israel and Syria. He had been approved by Secretary of State Condoleezza Rice to act as moderator for the discussions that would take place at the James A. Baker Institute for Public Policy in Houston. It is widely regarded as one of the most secure think tanks within the United States. The choice of Djerejian was also an astute one. An experienced Arabist and also trusted by Israel, he was calm and his authority was accompanied by a sense of humor. He had told Dr. Rice, to whom he would report progress, that “it’s going to be like chairing the United Nations.” One of Djerejian’s first tasks would be to tell the two teams that he would be totally impartial. It was a necessary reminder: for the past several decades the centerpiece of America’s Middle East policy had revolved around its relationship with Israel. While there had been what former CIA director, George Tenet, had called “blips on the radar,” the combination of Washington’s unwavering support for Israel, and its own efforts to spread democracy through-out the region, had inflamed Islamic opinion. In Arab capitals the bond between the two countries was seen as based on shared strategic interests and the demands promoted by the powerful Jewish lobby within the United States. Even though other special-interest groups had some effect on aspects of U.S. foreign policy, none had managed to convince Americans, as the lobby had, that America’s interests and those of Israel were essentially identical.

That fusing began after the October War in 1973 when Israel had been seriously threatened by superior Arab forces. To ensure that could never happen again, Washington had provided the Jewish state with a level of support far greater than it had given to any other nation. Since then, Israel had received over $3 billion in direct assistance — worth about $500 a year for every Israeli man, woman, and child. The largesse was particularly striking as Israel was, by the new millennium, a wealthy industrial country with a per capita income equal to that of Spain or South Korea. Other countries in receipt of U.S. foreign aid tend to receive the money in quarterly installments. Israel, on the other hand, gets its entire appropriation at the start of each fiscal year. This enables Israel to earn valuable interest on the stock markets of the world using money it will only later drawdown.

There are other terms which give Israel “favored status.” It is allowed to use 25 percent of its allocation to subsidize its own defense industry; again, no other nation is allowed to use U.S. funds for that purpose. Neither does Israel have to account for how the money is spent; this makes it hard for Washington to prevent the allocation being only partly used for purposes, which Israel opposes, such as building settlements on the West Bank. Moreover, Washington has encouraged Israel’s burgeoning defense industry to use a substantial amount of the annual budget it provides to develop the latest weapons systems. Some of these have been created from material stolen from the United States (see chapter 10, “A Dangerous Liaison”). The United States has also given Israel, at production costs, Black Hawk helicopters and F-16 jets. To top it all off, it has given the Jewish state vital intelligence it refuses to share with its NATO allies and has continued to allow Israel to increase its arsenal of nuclear weapons.

On the day their aircraft headed out from Ben Gurion airport, the men in their First Class armchairs would have seen on their left the distant outline of Dimona, the country’s nuclear facility where over two hundred kinds of nuclear weapons were stored in 2006.

Equally important, successive U.S. administrations provided Israel with invaluable diplomatic support. Since 1982 the United States vetoed thirty-two significant resolutions critical of Israel: this was more than all the numbers of vetoes cast by all the other Security Council members. U.S. diplomatic support had also included blocking the efforts to put Israel’s nuclear arsenal on the International Atomic Energy Agency’s agenda — which would have laid Dimona open to inspection. Time and again America supported Israel in time of war and used its influence when negotiating peace. Successive U.S. administrations had protected Israel against Soviet threats and later played a crucial role in the 1993 Oslo Accords. Meir Amit, the former Mossad chief and in 2006 still an “elder” of the intelligence community, recalled (to the author): “There may have been occasional bumps along the way, but Washington consistently supported our position.” Rafi Eitan, Mossad’s retired director of operations and in 2006 the head of a small political grouping of pensioners in the Knesset, remembered: “Time and again Israel has found Washington functioning as our unpaid lawyer on the world stage.”

Eitan was among those who believed that Israel, for its part, had been a “valuable asset” to the United States during the Cold War. “In many ways we had acted as Washington’s proxy by helping to contain Soviet expansion in the region and inflicting heavy defeats on Soviet client states like Egypt and Syria. We had also helped to protect another U.S. ally, like Jordan, and, of course, we passed on important intelligence about Soviet intentions.”

But Israel had also provided sensitive military technology, either sent directly from the United States to the Jewish state or developed within its own defense industry, to countries like China and South Africa. The State Department’s inspector-general had described this as “a systematic, and continuing to grow, pattern of unauthorized transfers. Israel also remains the most aggressive in running operations against the U.S. of any ally.”

Since 9/11 Israel and the United States has become even closer enjoined—“like identical twins” Meir Dagan said — due to the war against terrorism. Part of that relationship has been to allow Tel Aviv a free hand on how it would deal with Hamas in the Gaza Strip and Hezbollah’s threat on Israel’s northern border.

It was against that background that the Houston discussions began. Much of the initial tension revolved around Uri Saguy. While he was seen in Israel as a hawk who had turned dove and the first to detect what he called “a sea of change in Damascus,” it was a judgment which made him unpopular in Israel together with his argument that the Golan Heights must be surrendered. But to Fatah he was also the man who had approved Mossad assassinations including attempts on Yasser Arafat’s life. Jibril Rajoud, for one, felt that “the jury is still out” on how Arafat had died. “Natural causes or murder, we may never now know,” he said.

At the end of each meeting, using secure communication links provided by the U.S. State Department, Rajoud reported to President Mahmoud Abbas and Saguy briefed Ehud Olmert. That briefing, by agreement, had included Meir Dagan. It was in every sense Olmert’s first real taste of international politics. The rise of the sixty-one-year-old lawyer had been meteoric as it was unexpected. Injured while serving in the Israeli Defense Forces as a combat officer, Olmert had completed his military service as a journalist on the Force’s BaMahne magazine. An untaxing position, it also had an unforeseen benefit. During the Yom Kippur War of 1973, Olmert joined General Ariel Sharon’s headquarters as a military reporter. Sharon took a liking to the tall Olmert in his carefully pressed uniform and shoulder pip, which identified him as a lieutenant. Others saw him as “arrogant, cold, cunning, and unpleasant.” That judgment, by Israeli’s historian Tom Segev, would follow Olmert after he took a law degree at the Hebrew University in Jerusalem and opened a successful law partnership. From there it was but a step into political life. In 1973, at the age of twenty-eight, he became the youngest member of the Knesset. “I was often impetuous and wrong in the early years,” he later admitted. He opposed Israel’s withdrawal from the Sinai land captured in the Six-Day War and had voted against the Camp David Peace Accords in 1978. The year before, he had also been embroiled in a political finance scandal involving Jerusalem businessmen, organized crime, and corrupt legislators. Though he was later acquitted, he was unable to shake off his image of a fat-cat lawyer tainted by sleaze.

On the February day the negotiators had flown out to Houston, an inquiry was announced into the 1999 sale and leaseback of Olmert’s Jerusalem house in allegedly questionable circumstances. But soon events brewing in Lebanon would see the investigation firmly placed on the back burner of Israel’s legal system. In the meantime, Olmert had become a rising, but colorless politician, holding portfolios that included health, communications, and finance until, in 2003, he became Sharon’s deputy prime-minister. By then he learned to control his temper with reporters and had cultivated an air of being shrewd. Benjamin Netanyahu, the new leader of Likud, the party Sharon had left to form Kadima, said that Olmert is “a very clever guy.” Certainly, while withdrawal went against Olmert’s hawkish views, he also now believed it was the only response to the changing demographics of a growing Palestinian population which could eventually outvote Israelis.

Olmert’s political position was one of the few times he found favor among his own family. His wife, Aliza, a left wing playwright and a painter whom he had met at college, publicly admitted she had been at odds with his right wing politics for much of their thirty-five-year marriage. Their children shared her dovish views. His daughter, Danna, a lesbian who lived openly with her girlfriend in Tel Aviv, was an active member of Machson Watch, a group monitoring Palestinian rights in Gaza and the West Bank. She had barely spoken to her father since he withdrew funding for an annual gay parade in the city in 2006. His eldest son, Shaul, had signed a petition refusing to serve in the Israeli army when he was ordered to duty in the occupied Palestinian territories. His brother, Ariel, named after Olmert’s admiration of Sharon, had avoided his military service by moving to Paris.

Just as with Syria’s Bashar al-Assad and Hassan Nasrallah, circumstances had intervened to change Ehud Olmert’s future. When Sharon announced he was leaving Likud to implement his plans for radical political adjustment that would take into account the demographic changes of a growing Palestinian population, Olmert had been one of the first to join him. When Sharon had collapsed from a massive stroke in January 2006, a month before the joint Israeli-Fatah team flew to Houston, Olmert became acting prime minister. When Kadima won the election, Olmert became head of a coalition government with the Labour party.

Weeks before then, the secret “back door channel” that came into operation after a series of meetings in Houston had — like so many other expectations involving the Middle East — achieved little. Saguy commented, “It’s really a question of whether we both saw the glass as being half full or half empty.”

Mossad analysts had already decided the Houston meetings were doomed to failure after Mahmoud Abbas had made it clear that underpinning them was his plan to solve his own mounting internal crisis in Gaza. Daily the plan brought closer the possibility of a civil war involving Fatah and Hamas as gun battles spread across the Gaza Strip between the two organizations. Hamas was determined to hang on to political power. Abbas saw resolution in what he called the “prisoners’ covenant,” a document worked out by Hamas and Fatah prisoners in Israeli jails and designed to be “a platform for national reconciliation.” Abbas had seized upon the covenant as a solution to the crisis erupting all around him. What he had failed to take into account was that his search for an internal solution in Gaza had reduced his “already desperately narrow space for compromise in future peace negotiations with Israel,” one analyst wrote.

Shlomo Ben-Ami, a former foreign minister of Israel, had echoed that view. “It is one thing to work out a platform for an internal peace with Hamas and quite another to ask Israel to subscribe to such a platform. Referenda are supposed to approve peace deals; they are not made in advance of peace negotiations to tie the hands of the negotiators.”

The flaws in Abbas’s initiative arose from the wrong assumption that he could reconcile his domestic crisis and use a united Hamas Fatah alliance to strong-arm Israel into reopening peace talks or face the consequence of renewed attacks. There was much more in the covenant that the Mossad analysts knew would be rejected. One example was its repetitive demand for Palestinian refugees to return to their former lands in Israel, the mystical “right of return.” The document also represented a clear departure from Fatah’s willingness to consider compromises on border adjustments and the controversial position of Jerusalem. All these had been stumbling blocks in the past. Now the document made it clear that they were non-negotiable. Legitimized by Abbas’s endorsement, it led to further radicalization of Fatah and the growing fear in Israel that it did not have a negotiating partner on the Palestinian side, regardless of who was in office in Gaza and the West Bank. The expectations of Houston, never high, were now dead.

As the first quarter of 2006 drew to a close, for part of what was called “the education of Ehud Olmert,” Mossad continued, on the sixth floor of its headquarters, to supply the new prime minister with only carefully selected intelligence. The mood within Mossad was that Olmert was still struggling to shake off the shadow of his illustrious predecessor, Ariel Sharon. With tensions mounting in Gaza and the West Bank, and further north on the border with Lebanon and in the Beka’a Valley, the fear was that Olmert did not yet have Ariel Sharon’s capability to see what Meir Dagan called “the big picture.” Israelis continued to have deep reservations about Olmert’s political decisions, though few would deny they could count on “Arik”—the nickname that the comatose Sharon had enjoyed all his political life — to fight in their corner. And unlike other flamboyant characters who had occupied the prime minister’s office — including the devious Moshe Dayan, the iconic Yitzhak Rabin, and the driven “Bibi” Netanyahu — Ehud Olmert gave the impression of being the backroom, career politician who had risen, almost without trace, to implement Sharon’s plan to complete Israel’s unilateral withdrawal from the Palestinian territories it had occupied since the Six-Day War in 1967. While Israelis were open to persuasion by Ariel Sharon, they increasingly wondered if Olmert had the skills to ensure that Israel would not be drawn into conflict. In a martial nation like Israel, whose voters have traditionally been reassured by the presence of a battle-hardened veteran at the political helm, Meir Dagan knew that Olmert faced a massive task in trying to convince his countrymen that their security was as safe in his hands as it had been under Ariel Sharon.

With Mahmoud Abbas’s power base in Gaza almost daily being further eroded and Hamas’s continued rhetoric against its near neighbor, Ehud Olmert became more belligerent. While Israeli prime ministers have rarely been inclined to demonstrate restraint when responding to Arab provocation because the eye-for-an-eye ethos is far too deeply ingrained in the national psyche, the language coming from the new prime minister raised the question: Just how serious was his government in coming to a negotiated settlement with the Palestinians?

Mossad analysts increasingly felt that irrespective of the pledges Ehud Olmert had given President Bush and Prime Minister Blair about adhering to the principles of the much-maligned “road map” for a permanent Arab/Israeli peace deal, Olmert would welcome the chance for a military resolution with Hamas and Hezbollah, a view his generals also encouraged. They saw it as one way to deal with the “plight of the Palestinians,” the potent propaganda tool for radical Islamic groups in the Middle East and beyond — a tool which would remain as long as the Palestinian aspirations for statehood remained unfulfilled. There was a feeling in Mossad that Ehud Olmert wanted an opportunity to show he was as rough as Ariel Sharon, both as politician and as a military leader. That feeling had been reinforced by what Meir Dagan described at his weekly senior staff meeting in early May 2006, as “a Shia expansion.” He asked them to “join the dots” and find answers to pressing questions. What was the exact nature of the current link between Hezbollah and Hamas after Iran’s President Ahmadinejad had publicly embraced the Sunni organization? What was the involvement of Iran in Gaza and the West Bank? Was there evidence of a shift of power between Syria and Iran, which could change the geopolitics of the region for the foreseeable future?

The answers were not reassuring. The signs were that the doctrinal, cultural, and political differences between the Sunni Hamas and the Shia Hezbollah were being buried in the common cause to destroy Israel. Bashar al-Assad, who has a powerful resemblance to his father — the same high forehead and piercing eyes — had begun to try and steer Syria clear of the theocratic militancy of Iran his father had supported, but in the complex religious map of the region, the al-Assads are members of a minority Shia sect in a predominantly Sunni majority Syria. But increasingly the new power of the Iraqi Shia—65 percent of the population — had allowed Iran to profit enormously from their dominant role in that chaotic country. A Mossad report revealed: “Iraq’s Shia leaders regularly visit Tehran to settle issues such as border security and developing joint energy projects. Iranian businessmen are investing heavily in Iraq’s overwhelmingly Shia southern regions and Iran’s highly skilled intelligence operatives are embedded in Iraq’s nascent security forces and within the Shia militias who rule the streets of Basra.”

Even more worrying for Israel, Mossad undercover agents reported the growing presence of those spies in the Hezbollah strongholds in the Beka’a Valley. It was there that the organization was believed to have stockpiled its growing supply of missiles and rockets supplied by Iran. One Mossad report put the figure at 18,000. This number included the Katyusha rockets made in Russia, which have a range of fifteen kilometers. More powerful were the Iranian-built Fajr-3 missiles, almost six meters long, which have a range of almost forty kilometers. Most powerful of all were Iran’s version of a Scud missile, the Shabtai-1. They could reach any Israeli city. When Iraqi Scuds rained down on Haifa and Tel Aviv during the Desert Storm conflict in 1991 (see chapter 16, “Spies in the Sand”), hundreds of buildings were destroyed and scores of civilians injured. One of Mossad’s yaholomin, the electronic surveillance units, had picked up conversations between Mahmoud Ahmadinejad and Khalid Meshal in his fortress-like villa in a suburb in the north of Damascus. Meshal, who had survived a Mossad assassination attempt in Amman, Jordan, was now the overall strategist for Hamas and a respected figure within Hezbollah.

Meir Dagan was a good example that much intelligence is anti-historical because it uses stratagems to frustrate the truth as well as unearth it. Facts are often directed toward some distant, unwritten goal, and it is the highest purpose of any intelligence to leave complicity hidden and ambiguous. At the Mossad training school, the Sources and Methods class reminds students that they cannot simply adhere to the historian’s discipline; that a perfect historian must possess an imagination sufficiently powerful to make his narrative affecting and picturesque, but he must control it so absolutely to work only with the material on hand and refrain from supplementing deficiencies with additions of his own. But the class instructor explained that in intelligence work the deficiencies are precisely what is expected to be supplied. “Action cannot wait for certainty. Motive deception will be at the center of their endeavors. They will create situations to draw fact out of the darkness. The art of informed conjecture will be part of their skills, but always to be used within the range of probability. Their writ will confine them to the realm of surmise,” one of the instructors told the author.

Those finely-honed skills had served Meir Dagan well. Now they went into overdrive after Mohammad Khatami, a senior member of the Iranian leadership, in the second week of May described Hezbollah as “the sun of Islam who will soon shine even brighter.” A few days later President Ahmadinejad ended another of his anti-Semitic harangues to a Tehran crowd with the promise: “We shall very soon witness the elimination of the Zionist state of shame.” Was this merely more rabble-rousing rhetoric? Or was it finally the precursor of what Dagan had long predicted: an attack on Israel on two fronts — Hamas in Gaza and Hezbollah coming out of the olive and banana groves of south Lebanon and the Beka’a Valley? And would that be the moment Iran would mobilize its Revolutionary Guards and would al-Qaeda seize the opportunity to marshal its untold numbers of jihadists throughout the Muslim world. To try and find answers Meir Dagan had sent encoded priority signals to Mossad stations across the Middle East to report signs of mobilization. Then he refreshed himself on Hezbollah and its previous methods.

Throughout the 1980s the organization, having adopted the name of the “Party of God,” kidnapped more than two hundred nationals in Lebanon — mainly American or western Europeans, including Terry Waite, the Archbishop of Canterbury’s envoy. It had organized the highjacking of civilian aircrafts and had more or less pioneered the idea of suicide bombings against American and French targets — killing almost 1,000 people — including 241 U.S. Marines in Beirut and 58 French paratroopers.

By the time the Iran-Iraq War was over, Tehran saw the “Party of God” as a trump card it could play in the Middle East by using it to influence the broader course of regional politics and to wage a low-intensity war against Israel. The emergence of Hassan Nasrallah led to Hezbollah controlling southern Lebanon. Financially it cost Iran very little — no more than one day’s profit from its oil revenue at €50 million a year — to maintain Hezbollah. However, Hezbollah was also funded by income from businesses set up by the movement. These included a bank, a mortgage co-operative, an insurance company, six hotels, a chain of supermarkets across south Lebanon and the Beka’a Valley, a dozen urban bus and taxi companies, and a travel agency that sends tens of thousands of pilgrims to Mecca and other Muslim holy places. Between them they provide Hezbollah with €300 million a year.

The Beka’a Valley had become its power base, centered on the historic city of Balbeck, with its own modern hospital and staffed by Syrian and Iranian doctors and nurses. It also ran clinics, a social welfare system, centers for orphans and widows, and schools — where the syllabus was identical to the one taught in Iran. It collected its own taxes with a 20 percent levy, called khoms, on all incomes. All this contributed to the image of Hezbollah being an independent state within the state of Lebanon. To emphasize its status, it had a number of “embassies”; the one in Tehran is the largest; others are situated in Yemen, Damascus, and Beirut.

Its relationship with the rest of Lebanon was complex. In May 2006, it still held 14 seats in the 128-seat national assembly, including 2 portfolios in the council of ministers. But Hezbollah also insisted it was primarily “a people-based movement fighting on behalf of the Muslim world.” To reinforce that idea, it has a powerful media department, including its satellite television channel, al-Manar (the lighthouse), which transmitted to the entire Arab world and was regarded by many viewers as better than al-Jazeera. Supporting its rolling news channel were four radio stations, two newspapers, several magazines, and a book publishing house. Its own police force worked within sharia law and Hezbollah courts sent the convicted to its own prisons in the Beka’a Valley.

Mossad estimated its militia numbered nine thousand in May 2006: the well-equipped fighters were backed by an estimated three hundred thousand reservists. It was a more powerful force than the Lebanese-Armed Forces that was supposed to have disarmed it under the United Nations Resolution 1559. That was unlikely to happen, given the majority of the army were Shi’ites and would refuse to fight their own.

Within Iran, Hezbollah’s support bridged the political divides within the ruling establishment. The country’s mullahs, whether “reformist” or “hardliner,” regarded Hezbollah as a reminder of their own revolutionary youth. In the same week that Mohammad Khatami and President Ahmadinejad had delivered their chilling words, the Majlis, the Iranian Parliament, had temporarily set aside their arguments to unite in demanding that the Revolutionary Guards should be ready to fight alongside Hezbollah should Hassan Nasrallah call upon them. The deputies had also agreed to send Hamas an “emergency grant as a gift” to counter the freeze imposed by the European Union and other international donations intended for the new Palestinian government. It was Iran’s first move to marginalize Mahmoud Abbas and make Hamas the only legitimate representative of the Palestinian people. In Lebanon, Hezbollah had begun to lean on the new pro-American coalition government led by Fouad Siniora and Walid Jumblatt, the Druze leader.

For Meir Dagan the situation was starkly clear. Iran was positioning itself to expand its influence through what could be a pincer movement by Hamas and Hezbollah — the war on two fronts the intelligence chief had long feared. Success for Tehran would mean for the first time since the seventh century its direct power would have extended to the shores of the Mediterranean. If Israel were to launch a preemptive strike — under the guise of being the regional champion of western democracy at the frontline in the fight against political Islam — it might earn the approval of the Bush administration, but it would leave Israel exposed to fierce criticism elsewhere. Meir Dagan’s advice to Olmert was that Israel should continue to “wait and see.” In the meantime, two of his predecessors, Efraim Halevy and Meir Amit, also started to sound a warning.

After four years at the helm, Efraim Halevy had departed as Mossad’s spymaster as quietly as he had arrived. Within Mossad ranks, the memory of his studious presence — his thin lips pursed before speaking, his eyes impassive behind his spectacles — had been largely forgotten. Those who did remember him on the upper floors spoke of Halevy as the man who spectacularly failed to lead the service into the new millennium and failed to make it a force to be reckoned with. In 2008 he published his memoir of those days, Man in the Shadows. It was an unsuccessful attempt to tell his side of the criticism that had dogged him throughout most of his tenure. But it also provided a platform for him to issue a warning: the further Israel is from the last attack, and for that matter, the countries of Europe and the United States, the closer it is to the next one. “Much of what lies ahead can only be achieved in a clandestine manner. In order to triumph we shall have to understand that diplomacy is the art of the possible, that intelligence is the craft of the impossible. And life is fast becoming more impossible than ever in human history,” he said (to the author).

In between time spent in London to launch his book and talking to Nathan, the Mossad station chief, he spoke to the author about his belief that the United States and Britain would have to “make fateful decisions” concerning their Middle East policies. “In Iran and Iraq they cannot simply gather their troops and head for home. They must adopt a firm exit strategy, one that will need a positive contribution from Israel. That will mean being sensitive to our interests and visions.” He concluded by delivering a grim warning: “We are looking down the barrel of World War Three unless the world wakes up.”

Shortly afterward, Meir Amit, now a member of Israel’s leading think-tank spoke out (to the author): “Israel must continue to take strong measures to defend itself. Terrorism is like a cancer, spreading silently and effectively. No nation can fight it alone. Saddam Hussein is yesterday’s monster. But we have a new one in Iran, whipping up the Shia revolutionary hurricane that will soon engulf Israel and, left unchecked, will engulf the world beyond our borders.”

The first breeze of that hurricane was already starting to blow across the Gaza Strip.

A reminder of the constant terrorist threat to Israel came when Swiss intelligence, working closely with a Mossad agent in the country and officers of France’s SDEC, disrupted a well-prepared plot to shoot down an El-Al passenger plane with a rocket propelled grenade as it flew in to land at Geneva airport. Documents recovered from the seven Algerians responsible showed the plot had been masterminded from Madrid. Shortly before the attack, its two al-Qaeda operators had returned to North Africa.

But cooperation did not always run so smoothly. Meir Dagan received a report from his Mossad agent in New York of a closed-door discussion between foreign ministers after intelligence predictions. These suggested that Iran was, in May 2006, “possibly only a year away from producing a nuclear device.” Tension erupted at the meeting when Russia’s foreign minister, Sergey Lavrov, verbally attacked the U.S. state department official, Nicholas Burns, who was the senior adviser to the meeting’s host, Condoleezza Rice. Lavrov accused Burns of “seeking to undermine our efforts to resolve the crisis with Iran.” Ministers from Britain, France, Germany, and China, all members of the United Nations Security Council, were stunned at Lavrov’s outburst in the Waldorf-Astoria Hotel suite where they had gathered. The Mossad agent’s report offered a revealing insight into the back-room disagreement of high-level diplomacy.

It was British foreign minister Margaret Beckett’s first day in her post and she was taken aback by how bad-tempered the discussion had become. Lavrov had arrived late and was still furious about a speech U.S. Vice President Cheney had just made in Lithuania in which he had criticized Kremlin policies. Lavrov castigated Dr. Rice and her team using the kind of language, Minister Beckett was heard to say, that was more in line with Cold War rhetoric. At one point, Lavrov threatened to veto a security council resolution that Britain and France had drafted and which Washington supported. It was a new attempt to persuade Iran to give up its uranium enrichment program.

Despite efforts by John Sawers, the British Foreign Office political director, to calm matters, Lavrov continued to rage. At another point, he attacked Israel claiming its policies were “designed to drag us all into conflict.” Dr. Rice intervened by telling Lavrov he was “not being helpful.” During dinner the row rumbled on until Lavrov abruptly left. The next day over breakfast John Sawers sat down with senior delegates from China, France, the United States, and Germany to find a proposal to put before the foreign ministers at their lunch. It would give Iran a new trade deal with the West, security guarantees against any attack from Israel, and nuclear technology “which will only be used for non-aggressive purposes” on condition Iran would halt all production of weapons-grade uranium.

Over lunch — salmon and Californian Chablis, which the French delegation barely touched — Dr. Rice emphasized the proposal was “a major shift in our policy.” However, Margaret Beckett had been briefed that it was doubtful Iran would accept it. The meal broke up with the decision to put the matter on hold for further discussion — diplomatic-speak meaning that it had little chance of success. At a summit of Islamic heads of state in Indonesia a few days later, President Ahmadinejad said, “I will consider negotiating with anyone except Israel. It has no place on this earth.”

The Mossad agent monitoring the conference had more disturbing news. Russian officials attending the conference as “observers” had secretly offered to sell Iran technology that could help protect its nuclear secrets from international scrutiny. The equipment would include state-of-the-art security encryption technology developed by Atlas Elektronik, a Russian government-controlled defense company.

As May drew to a close, the Israeli Defense Forces (IDF) found themselves increasingly responding to Hamas rocket attacks on settlements. Encouragement for Hamas to continue its guerrilla warfare grew more vociferous from Tehran. A Mossad deep-cover agent in the Iranian capital sent the first details of a hitherto unknown nuclear underground site in northern Iran at Abe-e Ali. The report revealed that over three hundred Chinese and North Korean nuclear experts were working to produce a new centrifuge to enable the high-speed purification of uranium to achieve the 90 percent level required for weapons-grade. Ehud Olmert agreed with Meir Dagan that the evidence was of such great importance the Mossad chief and Nathan should fly to London, and then on to Washington.

For several hours over orange juice, coffee, and sandwiches the two men showed John Scarlett and other MI6 officers the evidence acquired from inside Iran. It included close-up photographs of the Abe-e Ali complex and two new workshops at the Natanz uranium enrichment plant. Dagan’s briefing formed a key part of a meeting of Britain’s defense chiefs after Condoleezza Rice told Prime Minister Blair that “if all else fails on the diplomatic front, we are prepared to go it alone, or with the assistance of our good friend, Israel.” An official who was at the meeting told the author, “She made it plain that going it alone meant military action.”

The meeting was held in the monolithic Ministry of Defense building in Whitehall and was chaired by General Sir Michael Walker, the chief of Britain’s defense staff. The Foreign Office team was led by William Ehrman, director general of the defense office, and David Landman, head of the nuclear proliferation department. Both had played an important role in bringing Libya out of the political wilderness. John Scarlett and Eliza Manningham-Buller were on hand to brief the meeting on Israel’s position. For the first time the Pentagon battle plans for an all-out assault on Iran were on the table. Tactical Tomahawk cruise missiles would be launched from U.S. navy ships and submarines in the Gulf to target Iran’s air defense systems at the nuclear installations. The updated Tomahawks had an onboard facility that allowed them to be reprogrammed while in-flight to attack an alternative target once the initial one was destroyed. Each missile also had a “loitering” capability over a target area to provide damage assessment through its on-board TV camera. U.S. Air Force B2 stealth bombers, each equipped with eight 4,500-pound bunker-busting bombs, would fly from Diego Garcia, the isolated U.S. navy base in the Indian Ocean, the Whiteman USAF base in Missouri, and the USAF base at Fairford in Gloucestershire, England. Each meter-long bomb of hardened steel could penetrate six meters of concrete. There would be no ground-force follow-up attacks.

The meeting attendees then went on to discuss the risks associated with such an attack. The details were subsequently obtained by the author and are published here for the first time. The meeting attendees were told that an American-led attack could trigger “devastating reprisals” against the 8,500 British troops based in Iraq and the 4,000 British soldiers who had arrived in Afghanistan. Ehrman reminded them that both countries had strong religious and political ties to Iran. Walker predicted the attack might be preceded by Washington reorganizing its plan to withdraw a substantial number of troops from Iraq. It would also certainly lead to confrontation with China and Russia — whose support would lead to Iran cutting off its oil supplies to the West. Scarlett cited Meir Dagan’s view that the offensive on Iran would see a dramatic increase in suicide bomber attacks against Israel. The intelligence chief added that MI6 intelligence could provide no guarantee that an aerial assault on Iran would destroy the eight identified targets the Pentagon designated. These targets were:

• Saghand, a mining operation set to begin later this year, yielding fifty-to-sixty tons of uranium annually.

• Ardkan, where ore is purified to produce uranium ore concentrate known as yellowcake.

• Gehine, a mining and milling facility.

• Isfahan, where yellowcake is cleansed of impurities and converted to uranium hexafluoride gas.

• Natanz, an enrichment site, which can be used to produce weapons-grade uranium.

• Tehran, a research reactor and radioactive waste storage facility.

• Bushehr, a Russian-built light water reactor.

• Arak, a heavy water research reactor.

• Anarak, a nuclear waste storage site.

No date had yet been fixed for an air attack, but if Iran continued its bellicose attitude and ignored demands made by the UN, the Bush administration could launch military action in 2007, but possibly not later than the run-up to Bush’s final year in office in 2008. The present mission plans were two-phased. Cruise missiles would destroy defenses around the targets, then B2 stealth bombers would strike their plants with bunker-busting bombs. The Pentagon estimated the total mission time in the target areas at probably eight hours. Submarines would simultaneously launch rockets.

The meeting studied the latest intelligence on Iran’s current ballistic missile capability: a total of eighty-five S-300 air defense missiles. Provided by China, they would be effective against U.S. fighter-bombers, less so against the multi-defense systems of the Tactical Tomahawks. There were also forty X-55 cruise missiles, each with an estimated range of over one thousand miles. They were based close to the border with Turkmenistan. Less than thirty Shabtai-3 rockets provided by China and based in sites in southern Iran bringing them well within range of Israel. The Shahab-4 rocket was currently being developed near Natanz, south of Tehran. Present intelligence estimates said it would not come on line until 2008. Each would have a range of eight thousand miles — able to strike against anywhere in Europe and the United States. The present missiles could be adapted to fire from Iran’s twenty-five missile crafts and its three frigates. None, however, could be launched from Iran’s air force of two hundred aging aircraft: Tomcats, MIG-29 Fulcum, and Phantoms. Iran’s five hundred thousand army of regulars and conscripts were poorly led and trained. Most of their equipment comes from the former Soviet Union.

The meeting then turned to a lengthy discussion of who, apart from the Blair government and Israel, would support a U.S. attack. The conclusion was that diplomatic support within the European Union would probably only come from Poland.

What the meeting did not know, and which would only emerge in August 2006 (through Seymour Hersh, an investigative journalist), was that President Bush and Vice President Cheney had proposed using nuclear weapons to destroy the uranium enrichment plant at Natanz. The plan had been fiercely opposed by the Chairman of the Joint Chiefs of Staff, Marine General Peter Pace. He and other Pentagon commanders, at an equally secret meeting warned Bush and Cheney of what they saw as “the serious economic, political, and military consequences. A military strike on Natanz would vent fatal radiation for three hundred kilometers.” This would include Tehran and its multi-million population. The Pentagon chiefs argued for dropping the “largest possible bunker bombs available in a multi-drop attack which would generate sufficient force to accomplish what a nuclear warhead would achieve, but without provoking an outcry over what would be the first use of a nuclear weapon in conflict since Nagasaki.”

The chance of success by such an attack was challenged. A Pentagon adviser argued that such an attack “would be like bombing water, with its currents and eddies. The bombs would likely be diverted.” More certain was that such an attack would be seen throughout the Muslim world as another example of American imperialism and would lead to unprecedented retaliation. Already the growing prospect of such retaliation had come to preoccupy the intelligence services of Britain, Mossad, the CIA, and the Pakistan intelligence service. The threat was centered on a plot, that if successful, would lead to the greatest terrorist outrage the world had ever known.

Since March 2006, Operation Overt had become the largest, most secret and widespread surveillance and intelligence operation ever mounted in Britain, post-WW II. It had quickly widened to include Scotland Yard’s anti-terrorism squad and its special branch, GCHQ, Britain’s spy in the sky, NSA, its counterpart in the United States, the CIA and the FBI, the DSGE in France, Germany’s BND, the Pakistani intelligence service and Mossad.

In all some five hundred of the world’s most experienced spies were involved in an operation aimed at two British-based cells of suspected Islamic militants who were believed to be plotting a massive terrorist attack. How it would be carried out, the target, and its time and place were still unclear in late May 2006.

For weeks the intelligence teams had been patiently gathering the tentacles that had emerged from suspects uncovered in the “concentric circles” which materialized after the London bombings in July 2005. The first cell had been pinpointed after one suspect had returned from an al-Qaeda training camp in the “badlands” of northern Pakistan. The second cell had been identified as operating out of the Muslim community in the suburbs of south London. Both cells were placed under intense monitoring. All public meetings in both areas were infiltrated by MI5 officers. Telephone contacts by those who attended the gatherings were traced to Paris, Frankfurt, and, as one anti-terrorist officer later said, “to all points East and West.” E-mails were intercepted by GCHQ and NSA. From listening posts on the island of Cyprus to the deserts of Afghanistan, the mountains of Iran, and the North West Frontier border of Pakistan, the words of cell members and their associates were plucked out of the air, recorded, and sent to the Joint Terrorism Analysis Centre (JTAC) in London’s Millbank. Its Anacapa wall charts — specialist diagrams to create a coherent picture from all the incoming information — were constantly updated.

In the world outside, other stories came and went in the headlines. One was the assassination of Abu Musab al-Zarqawi, the murderous leader of al-Qaeda in Iraq. In late June 2006 his hideout near Baghdad was devastated by a laser-bomb attack. He had tried to crawl to safety, but had been shot by U.S. Special Forces. They were led to al-Zarqawi by a whistleblower in his midst. The man received “a very substantial payment” and was given a new identity in a country of his choice. He was assured its whereabouts would forever remain a secret.

Also in late June 2006, Hamas militants in Gaza kidnapped an Israeli soldier, Corporal Gilad Shalit. Israel promptly launched a massive offensive against targets in the territory. Ostensibly it was to recover Shalit. In reality it was the precursor of the war in Lebanon that started in July 2006. That was confirmed by Ehud Olmert on July 12 when Hezbollah guerrillas killed eight Israeli soldiers and kidnapped two more on the border of south Lebanon. Ehud Olmert called it “an act of war.” Two days later, with strong support from Israel, the U.S. and British missions at the United Nations opposed a motion on a ceasefire. By then, the first Hezbollah rockets rained down on Haifa and other towns in northern Israel. Israel’s powerful air force had made its first strikes on south Lebanon and Beirut. The dead were left where they lay, soon numbering a hundred a day. Meir Dagan found himself at the cutting edge of the conflict, deploying his agents into hostile territory.