A Secret Iran-Arafat Connection Is Seen Fueling the Mideast Fire

by Douglas Frantz and James Risen

TEL AVIV -- American and Israeli intelligence officials have concluded that Yasir Arafat has forged a new alliance with Iran that involves Iranian shipments of heavy weapons and millions of dollars to Palestinian groups that are waging guerrilla war against Israel.

The partnership, officials said, was arranged in a clandestine meeting in Moscow last May between two top aides to Mr. Arafat and Iranian government officials. The meeting took place while Mr. Arafat was visiting President Vladimir V. Putin of Russia, according to senior Israeli security officials who declined to describe the precise nature of their information.

The new alignment is significant for several reasons, American and Israeli officials said. In recent years, Iran's support for terrorism around the world has been on the wane, with the notable exception of its ties to Hezbollah, the militant group that fought for 18 years to expel Israel from southern Lebanon.

Israeli officials say they are alarmed by Mr. Arafat's alliance with Iran because they say it gives the Palestinians a powerful and well-armed patron in the increasingly violent conflict with Israel. American officials echoed that concern and said they were also worried by intelligence reports that say Tehran is harboring Al Qaeda members, including one leader who recently tried to mount an attack against Israel from his sanctuary in Iran.

Questions about Iran's relationship with the Palestinians came into public view early this year when Israel seized a ship carrying 50 tons of Iranian-supplied arms, including antitank weapons that could neutralize one of Israel's main military advantages over the Palestinians and rockets that could reach most cities in Israel.

Both the Palestinians and Iranians deny they are working together, but American and Israeli officials say they now see the shipment as part of a broader relationship. They say that began with several smaller attempts by Iranian-backed groups in Lebanon to supply arms and was cemented in the Moscow meeting. Officials of Israel and the United States say they believe that Mr. Arafat personally approved the dealings with Iran.

American officials said that Israeli intelligence reports about the Moscow meeting were at the heart of secret briefings that Israel provided to the Bush administration after the arms shipment was intercepted.

"There's plenty of evidence to show that it wasn't a rogue operation," a senior State Department official said of the ship that Israel seized in early January.

Palestinian Authority officials dismissed the charges of any Iranian involvement in their struggle against Israel and denied that Mr. Arafat knew of the arms shipment. They said the allegations were an attempt by Israel to discredit the Palestinians and to justify Israel's military operations in the West Bank and the Gaza Strip.

"This is a factory of lies," Yasir Abed Rabbo, the Palestinian minister of information, said. "Israel is like any colonial power. When they get in trouble, they try to blame outsiders. There has not been a single Iranian here since the 14th century."

Iran also has denied any involvement with the Palestinians or the arms shipments. Ali Shamkhani, the Iranian minister of defense, told the state news agency, "The Islamic Republic of Iran has had no military relations with Arafat, and no steps have been taken by any Iranian organization for the shipment of arms to the mentioned lands."

For several years, American counterterrorism experts believed Iran's terrorist apparatus had fallen dormant. Hezbollah and other groups backed by Iran had not attacked American targets since the Khobar Towers bombing in Saudi Arabia killed 19 American servicemen in 1996. Iranian leaders had apparently decided that state sponsorship of anti-American terrorism was too risky at a time when the country was trying to build closer economic ties with Europe.

Post-Intifada Enthusiasm

Iran also seemed locked out of Palestinian issues while Mr. Arafat pursued the Oslo peace process with Israel. Relations soured so badly between Tehran and Mr. Arafat after the Oslo accords in 1994 that the Palestinian leader became convinced that religious leaders in Iran had issued an order that he be killed for dealing with the Jewish state, according to American and Israeli officials.

But American intelligence officials said that they believe that the onset of the Palestinian uprising known as the intifada in September 2000 renewed the enthusiasm among Iran's hard-liners for terrorism.

"The main variable is that the intifada has stirred the radical juices in Iran," said a senior American official. "With the outbreak of the intifada, the Iranians decided they wanted things to burn hotter. The Iranians are now supporting a number of Palestinian groups -- it's been a bad news story on Iran over the last 18 months."

George J. Tenet, the director of central intelligence, recently told Congress that Iran's political reformers were losing momentum in the long-running battle for power with the conservative clerics who control the Iranian intelligence and security agencies that support extremist groups. He warned that there had been little reduction in Iran's backing for terrorism and he said that Tehran had failed to seal its eastern border with Afghanistan to block the escape of Al Qaeda members.

Israeli officials said there was new evidence that some Iranian officials have allowed Al Qaeda to use the country not just as a transit point after escaping Afghanistan, but as a staging area.

Abu Musaab Zarqawi, a senior Al Qaeda leader who fled the western Afghan city of Herat after the American military campaign began, has turned up in Tehran under the protection of Iranian security forces, according to senior Israeli and American officials.

Last month, Mr. Zarqawi dispatched three Afghan-trained operatives to attack Israel, Israeli officials said. The three, two Palestinians and a Jordanian, were arrested when they crossed from Iran into Turkey on Feb. 15.

Turkish authorities said the men had possessed fake documents, had diagrams for bombs and claimed that they intended to attack targets in Tel Aviv on orders from a leader known as Abu Musaab. Israeli intelligence said his full name was Abu Musaab Zarqawi, and American officials said he was believed to be the highest ranking Al Qaeda leader now in Iran.

The new information about his presence in Tehran raises questions about his actions and the activities of other Al Qaeda terrorists who entered Iran in recent months.

American officials say they are uncertain how much direct support senior Iranian government officials are giving to Al Qaeda members. Al Qaeda is a Sunni Muslim group, but Iran is Shiite. Moreover, Iran strongly supported the Afghan opposition groups that fought the Taliban.

But Mr. Tenet told a Senate committee that old religious divisions among Muslims did not rule out cooperation on terrorism against the United States and its allies.

There is evidence that Osama bin Laden sought to bridge the religious divide when it came to terrorist operations by exploring an alliance with the Iranian-backed guerrilla group Hezbollah as early as the mid-1990's.

Ali A. Mohamed, an Al Qaeda member convicted of conspiracy in the bombings of the American embassies in East Africa in 1998, testified that he had arranged security for a meeting in Sudan between Mr. bin Laden and Imad Mugniyah, the Hezbollah militant who masterminded the 1983 suicide attack on the Marine barracks in Beirut that killed 241 Americans and helped to define terrorism for Americans.

Among many Arabs, Hezbollah's status surged after its long military and terrorist campaign in southern Lebanon helped lead to the Israeli withdrawal from the country in May 2000. Its victory meant that Mr. Mugniyah and Hezbollah's terrorist wing had less work. Soon after the start of the Palestinian uprising, Iran sent Mr. Mugniyah to help the Palestinians, American and Israeli intelligence officials said.

"Mugniyah got orders from Tehran to work with Hamas," a former Clinton administration official said.

In Grip of Hard-Liners

United States intelligence officials say they are increasingly concerned by the mounting evidence of Tehran's renewed interest in terrorism, including covert surveillance by Iranian agents of possible American targets abroad. American officials said Iran appeared to view terrorism as deterrent against possible attack by the United States. "If there was a direct military operation by the United States against Iran," one intelligence official said, "Mugniyah would likely attack us."

Since the surprise election of reformer Mohammad Khatami as president of Iran in 1997 and his wide public support, Washington has been counting on a new moderate political majority to emerge. But the hard-line faction has maintained its grip on Iran's security apparatus, frustrating American efforts to ease tensions with Tehran.

Now, Iranian actions to destabilize the new interim government in Afghanistan, its willingness to assist Al Qaeda members and its fueling of the Palestinian uprising are prompting a reassessment in Washington, officials say.

At the same time, Israeli officials have become increasingly vocal about Iran's new ties to the Palestinians, partly to link their own fight to the American-led war on terrorism. Earlier this year, President Bush identified Iran, Iraq and North Korea as an "axis of evil."

American intelligence officials said Iran's Revolutionary Guards and intelligence service had considerable latitude for supporting Iranian proxies. They also supported Israeli assertions that Iran had become deeply involved in backing Palestinian militants, both through Hezbollah and in the training and financial support from Iranian intelligence agents.

United States officials said, for instance, that the Palestinian Islamic Jihad, one of the groups behind the wave of suicide bombings in Israel, was financed and directed by Iran. American and Israeli officials said that since the beginning of the Palestinian uprising 18 months ago, Tehran had paid millions of dollars in cash bonuses to the group for each attack against Israel.

Hamas, a far larger Palestinian extremist group, is also believed to receive Iranian support, though officials here in Israel and in the United States said its ties to Iran were less direct. Hamas has its own independent means of raising money and recruiting members, so Iran is believed to have less influence over the group.

Operatives of Islamic Jihad and Hamas have been trained in Hezbollah camps in southern Lebanon and some have received specialized training inside Iran, American and Israeli intelligence officials said.

Israeli officials said they had recently arrested three Hamas operatives who were returning from two years of specialized training at a Revolutionary Guards officers' course outside Tehran in Dara Kazwin.

Such training appears to have paid off. Recent attacks by the groups have exhibited hallmarks of the tactics used by Hezbollah against Israel in Lebanon, including the destruction of two Israeli tanks in recent weeks by roadside bombs.

In fact, Israeli and American officials believe that the 18-year struggle by Hezbollah in Lebanon, backed by tens of millions of dollars worth of arms from Iran, provided a model for what Tehran would like to recreate on the West Bank and the Gaza Strip. "The strategy is to make the West Bank another Lebanon," said one senior American intelligence official.

Israeli officials say they have seen no evidence of Iranian intelligence operatives working directly in the West Bank or the Gaza Strip. Instead, they said, Iranian and Hezbollah operatives meet with Palestinian militants and their intermediaries in Syria, Jordan and Lebanon.

Growing Aid to Palestinians

Jordanian intelligence officials said they had thwarted many attempts by Iran and its proxies to mount attacks against Israel from Jordan. Last weekend, Sayyed Hassan Nasrallah, the secretary general of Hezbollah, criticized Jordan for blocking the group's efforts to smuggle weapons to the Palestinians. Meanwhile, Iranian-backed charitable organizations have stepped up financial support for the Palestinians, according to American officials. Israeli officials added that some Palestinians wounded in the uprising were being treated in hospitals in Iran, where Iranian agents sometimes try to recruit them.

But the most visible evidence of the new strategic partnership between the Palestinian Authority and Iran came in the case of the Karine A, a ship laden with 50 tons of mortars, rockets, missiles and explosives from Iran that was seized by Israeli commandos in early January.

The Karine A was a direct outgrowth of the secret meeting in Moscow last May between Mr. Arafat's representatives and Iranian intelligence officers, senior Israeli security officials said.

The shipping venture followed several failed attempts to smuggle weapons from Lebanon by sea into the Gaza Strip. One had occurred early last May when Israeli authorities intercepted the Santorini, a fishing vessel carrying weapons bound for Palestinian extremists. Israeli officials said there were at least three bungled attempts before that, including one earlier shipment by the Santorini.

In response to those failures, the Israeli security officials said, Mr. Arafat sought a deal with the Iranians for a more serious alliance. In exchange for a more professional approach to arms support, Mr. Arafat agreed to provide Iran with access to Palestinian intelligence on Israeli military positions and defenses, they said.

The arrangement was completed in Moscow, where the Palestinian leader instructed two trusted aides to meet with Iranian government officials, Israeli intelligence officials said.

The Israelis declined to identify the Iranians involved, but the Arafat aides were identified as Fuad Shobaki, the chief financial officer for military operations for the Palestine Liberation Organization and part of Mr. Arafat's inner circle, and Fathi al-Razem, deputy commander of the Palestinian naval police.

Follow-up meetings were also held between the Palestinians and the Iranians, but Israeli officials said the Iranians were careful never to hold any of the meetings in Iran for fear of exposing their involvement.

Israeli officials said the Karine A was a highly sophisticated operation, planned to give the Palestinians a quantum leap in firepower and change the military calculus in the uprising.

Evidence of Arafat's Role

The Israelis have been unable to tie the shipment directly to Mr. Arafat, but Israeli officials said the involvement of senior Palestinian Authority officials and Mr. Arafat's well-known attention to financial details created a strong circumstantial case for his knowledge.

American officials agreed that Mr. Arafat's representatives met with Iranian government officials in Moscow, though the Americans said they were uncertain whether the meeting was to complete the arms shipment or was one of several meetings.

"But there is no question that at some point the Iranians and people very close to Arafat came together and that Arafat was fully aware of it," said a senior State Department official.

The ship's captain was an officer in the Palestinian navy who was living in Libya, and three of the crew members were Palestinians, including one who tool diving lessons in Lebanon provided by Hezbollah, Israeli security officials said.

In addition, the officials said, a Palestinian naval officer, Adel al-Mughrabi, bought the ship and was in radio contact with its crew during the voyage from an island off the coast of Iran where it picked up the weapons to the point in the Red Sea where the ship was seized by Israelis.

The ship's captain, Omar Akawi, who said he was a 25-year member of Mr. Arafat's Fatah organization, told news organizations in interviews arranged by Israeli authorities in January that he knew he was carrying arms to the Palestinian Authority.

The ship contained an arsenal that could have escalated the war between Palestinians and Israelis. Among the munitions were 62 Katyusha rockets capable of reaching almost any city in Israel, hundreds of mortars and grenades, antitank and antipersonnel mines and two tons of explosives.

The explosives included a ton of C-4, which Israeli authorities said is nearly three times more powerful than the homemade explosives used by most Palestinian suicide bombers.

The identifying markings on the munitions had been sanded off, but most of them are manufactured only in Iran, Israeli security officials said.

Mr. Arafat and his aides denied any knowledge of the shipment, though they have said some Palestinian Authority personnel were involved.

Within Palestinian political circles, moderates were angered that Mr. Arafat had apparently struck a deal with the Iranians, risking American wrath, a Palestinian negotiator said. But other officials defended the attempt as essential to combating the overwhelming firepower of the Israelis.

The discovery sparked an intense debate within the Bush administration, American officials said. Secretary of Defense Donald H. Rumsfeld and some others argued that relations should be broken off with Mr. Arafat, but Secretary of State Colin L. Powell contended that there was nothing to gain by cutting ties with the Palestinians.

In the end, Secretary Powell and President Bush chastised Mr. Arafat publicly over the shipment, but the United States did not end its relations with the Palestinian leader.

The New York Times, March 24, 2002.