Israeli role in US-Iran deals spawns two-edged credibility crisis. Questions raised about officials' honesty at home and with US

Israel's admission of its role in United States arms sales to Iran has plunged the govenrment into a credibility crisis similar to the one experienced by the Reagan administration. The political battle lines have already been drawn, with Knesset (parliament) members across the political spectrum criticizing the Israeli decision on the arms sales as immoral, undemocratic, and tantamount to complicity in violation of US law.

In a stormy parliament debate on the issue Wednesday, Foreign Minister Shimon Peres - who was Israel's premier at the time of the alleged dealings - defended the arms sales as an ethical act taken to assist the US in rescuing its hostages held by pro-Iranian groups in Lebanon. Mr. Peres said Israel had ``not made a penny'' on the payments made by Iran. He denied that Israel had known that some of the funds had been transferred to Nicaraguan contra rebels. The Israeli government's credibility crisis appears to be two-edged: It has raised questions both about the honesty of Israeli officials in their dealings with the US and about their accountability to the Israeli public. A host of unanswered questions have been asked.

Did Israeli officials participate in the arms sales scheme knowing that it was carried out without the knowledge of US Secretary of State George Shultz, Secretary of Defense Caspar Weinberger, or even President Reagan? If so, how will Israeli leaders be able to explain their hiding of the deal during contacts over the last year with US administration officials - especially Shultz who is viewed here as a staunch friend of Israel. Did Israel become a tool of the White House's National Security Council in violating US bans on weapons sales to Iran and funding to the contras in Nicaragua?

Political analysts have warned that Israel's involvement in the US-Iran arms deal, which was carried out by bypassing the US Congress, could cause grievous damage to its standing in the US legislature, where it has enjoyed a wide measure of support. The observers note that Israel has, by its own admission, been implicated in a scheme which supplied precisely the kind of aid opposed most severely by Congress: military support for Iran and funding for the Nicaraguan contras.

The government's internal credibility crisis is generated by strong criticism of the decision-making process which led to the arms sale. At Wednesday's parliamentary debate legislators criticized Prime Minister Yitzak Shamir, Peres, and Defense Minister Yitzak Rabin for conducting Israel's arms sales policy in secret without reporting the parliament plenum or secret committees.

Elezar Granot, a left-wing Knesset member, said Shamir, Peres, and Rabin had in effect acted alone to pursue an immoral policy without proper legislative controls. Another member compared the move to the ``adventurism'' of Israel's 1982 invasion of Lebanon, and demanded an inquiry commission. Mordechai Virshubski, a centrist, demanded a thorough overhaul of the government's decision-making process on arms sales.

Writing in the afternoon daily, Maariv, editor Ido Dissenchik said that the conduct of policy by ``a cabinet within a cabinet ... has led to a distorted reality of secret decisions made behind closed doors.'' The existence of a broad coalition government in Israel meant there was no significant oppostion, which reduced the executive's accountability to the legislature, Dissenchik wrote.

``Israel is now intimately involved in a first class constitutional and government scandal in the [US]. In a properly run state, no government or leader could escape responsibility for such a disgraceful failure. In Israel there will be no such problem. Anyone who could possibly serve as alternative leadership is a partner [in government],'' he wrote. ``There is no one to dismiss and no one to resign, unless everyone resigns together.''

Some political analysts question whether Israeli policy makers had not been dragged into the risky arms deal by Israeli weapons merchants looking for profits. Beyond the moral problem created by supporting the Khomeini regime, these observers say, Israel's arms sales to Iran have openly allied it with the same regime which has sent radical Shiite Muslim militiamen to attack Israel from Lebanon. Said one legislator: ``I hate to see the day when an Israeli-made shell hits [the northern Israeli town] Kiryat Shemona.''

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