Israeli officials say they expect new revelations in the Iran-contra arms scandal to emerge soon, and they fear that the new details may cause at least partial damage to relations between the United States and Israel. ``The real question is how much is going to come out once [Lt. Col.] Oliver North is granted immunity,'' said a senior official who was involved on the Israeli side of the covert operation to sell arms to Iran. The official, who spoke on condition he not be identified, said he has ``no doubts'' that Colonel North will be granted some form of immunity that would allow him to testify.
The official refused to say what revelations North might make that could damage Israel.
In conversations with several Israeli government sources, however, a recurring fear emerged. It is that, because the Iran operation backfired badly, Israel now is in danger of appearing as a reckless risk-taker which persuaded the US administration to follow a covert policy that was in direct contradiction to President Reagan's stated policy against making any deals with terrorists.
``It is just reinforcing the perception that whenever something dirty is being done, Israel is involved,'' one official said.
The Israelis have already taken steps to limit damage from the affair, but one source complained that their job has been complicated by intra-administration squabbling in Washington. Several Israeli sources expressed amazement over Mr. Reagan's handling of the investigation, and said they were dismayed by the painfully slow emergence of details.
The Israelis portray themselves as torn between two desires: to protect a President regarded here as a staunch friend and to preserve relations with a Congress that traditionally has been key to maintaining Israel's influence in Washington. The Israelis have tried to maintain a balance by stressing their willingness to cooperate while trying not to contradict openly Reagan's version of the affair.
A senior Israeli official said Tuesday that Israel will cooperate with the special prosecutor appointed to conduct an independent investigation of the operation. ``Certainly to the extent of at least allowing Israeli officials involved to answer questionnaires, yes,'' he said. The same senior official also said there has been no decision here on whether Israelis who were working for the government and who were involved in the operation would be allowed to testify before Congress.
Former Foreign Ministry Director General David Kimche, former Prime Minister Shimon Peres's adviser on terrorism Amiram Nir, and Al Schwimmer, Mr. Peres's adviser on technology, are three Israeli officials US investigators are likely to want to see, officials here said. Mr. Kimche and Mr. Schwimmer, who holds dual US-Israeli citizenship, were involved in the operation's first phase, which began in August 1985 with a shipment of 100 TOW antitank missiles from Israel to Tehran. Kimche is believed to have been in charge of the political side of the operation; Schwimmer, a longtime Peres confidant, in charge of logistics.
Mr. Nir was involved in the second phase of the operation, in which Israel's role seems to have been substantially reduced and the US began shipping arms directly to Tehran. Kimche, Nir, and Schwimmer all were involved in the operation ``in their official capacities,'' says an official Israeli source.
The irony, senior officials said, is that the Iran operation initially was seen here as an opportunity to demonstrate to the Reagan administration Israel's ability to deliver for the US.
It was seized upon as a way to smooth over relations that had been disrupted by the arrest in 1985 of Jonathan Jay Pollard, an American who later was convicted of spying in the US for Israel. The Pollard affair deeply embarrassed the Israelis, and raised fears within senior political echelons and the intelligence community that permanent damage had been done to Israel's crucial relationship with its superpower ally.
``When the Americans asked for help in getting out the [American hostages held by pro-Iranian forces in Lebanon], it seemed like the perfect opportunity to erase Pollard,'' one official said.
In addition to damaging Israel's standing in American public opinion and with the Congress, clarifications of the extent and timing of Israeli involvement in the Iran-contra affair could put Israel at risk of being found guilty for violating US law. Much depends on who is telling the truth about when Reagan began authorizing Israeli arms shipments to Tehran.
To date, key American figures in the operation have provided conflicting accounts on this point. Robert McFarlane, former national security adviser, testified to Congress that Israel's first shipment of arms to Iran in August 1985 was done with Reagan's prior verbal approval. If true, then Israel would not have violated a law prohibiting the sale of US arms to Iran. But US Attorney General Edwin Meese has said that the first shipment was made without the President's prior approval, and was approved only retroactively.
There also are conflicting versions on whether Israel knew that profits from the sale of arms to Iran were being diverted to the Nicaraguan contra rebels. The Israelis insist they did not know. US administration officials have said that Israel handled the contra account.
North so far has refused to answer questions put to him by congressional committees on his involvement in the affair, pleading his constitutional right under the Fifth Amendment. White House officials have said that North is the only man who knew all details of the complex operation that involved selling arms to Iran, then skimming off some of the profits from those arms sales to fund the Reagan administration-backed contras.