New Zealand Prime Minister Helen Clark suspended all high-level contacts with Israel on Thursday after two Israelis suspected of being spies for the Mossad were jailed for trying to obtain a passport illegally.
"This new fiasco makes more necessary than ever the passage of a law governing the Mossad's activities and parliamentary supervision," said Israeli opposition member of Knesset Zahava Galon on Friday.
A New Zealand court sentenced Uriel Zoshe Kelman and Eli Cara to six months in prison after they pleaded guilty of trying to fraudulently obtain a New Zealand passport.
The two Israeli men had assumed the identity of a wheelchair-bound cerebral palsy victim who lived in their neighbourhood.
They were let off from serving a further three months after offering to donate NZ$50,000 ($32,700) each to a local charity.
Israel, which has not admitted the two men worked for the Mossad, has refused to apologise in the affair.
In an angry statement, New Zealand Prime Minister Helen Clark slammed the spies' actions as a breach of Wellington's sovereignty and international law on Thursday.
Not a precedent
Clark had pointed out it was not the first time Israel had sought fraudulently to obtain passports from another country.
Some previous international scandals involving Mossad and other Israeli intelligence agencies:
* 1954 - Egypt cracks Israeli Military Intelligence cell of
Egyptian Jews who firebombed sites frequented by Westerners to embarrass Cairo and prevent the nationalisation of the Suez Canal. Defence Minister Pinhas Lavon quits, but denies authorising plot.
* 1985 - US Navy analyst Jonathan Pollard is arrested for
passing intelligence to Lakam, an Israeli agency specialising
in scientific cooperation. Israel apologises to Washington and dismantles Lakam. Pollard is sentenced to life in prison and is still incarcerated.
* 1991 - Four Israelis, widely reported to be Mossad agents, are arrested during an apparent attempt to bug the Iranian embassy in Cyprus. They are released for lack of evidence.
* 1997 - Two Mossad assassins are captured by Jordanian
authorities after a failed attempt to kill Khalid Meshaal, a Hamas leader, in Amman. They are sent home after Israel frees jailed Hamas founder Shaikh Ahmad Yassin. Israel then promises Canada to never again use its passports. Yassin was assassinated by Israeli helicopters earlier this year.
* 1998 - A group of Israelis is discovered trying to tap
the phones of a suspected Lebanese Hizb Allah activist in
Switzerland. In a closed-door trial, one Israeli, described in
the media as a Mossad agent, is fined and given a suspended
jail sentence. His three accomplices are released.
*In Cyprus, two suspected Mossad agents are arrested and
charged with spying on sensitive military installations. They
are released after nine months in prison under a plea bargain.
"Israeli agents caught in an unsuccessful assassination attempt in Jordan in 1997 were found to be carrying fraudulent Canadian passports," she said.
Israeli Foreign Minister Sylvan Shalom said on Thursday he "regretted" New Zealand's reaction to the case.
"Of course, we regret this response, but we think this decision is a decision that can be fixed," Shalom said.
"We will do everything necessary - together with the New Zealand government - to restore relations."
Clark said the statement did not go far enough and said she would scrap a planned visit by Israeli President Moshe Katsav in August and impose other diplomatic sanctions until she received a formal apology from Israel.
She also said Israeli officials would now require a visa to enter New Zealand.
The matter is considered sufficiently serious for the members of parliament's sub-committee on intelligence to demand explanations, Israeli army radio reported on Friday.
Galon, of the left-wing Meretz party, said oversight legislation already existed for the domestic security agency Shin Beth.
The Mossad, which has between 2000 and 3000 agents and reports directly to the prime minister, made a name for itself with a number of high-profile attacks targeting Palestinian resistance groups.
The agency methodically assassinated officials of the Palestinian organisation Black September.
In October 1995, Mossad agents murdered Fathi Shiqaqi, head of the Palestinian resistance group Islamic Jihad, in Malta.
Mossad chief Meir Dagan, 55, who took the job last October, was a political adviser in Sharon's election campaign.
For their part, leaders of New Zealand's Jewish community reacted with concern to the breach.
New Zealand Jewish Chronicle editor, Mike Regan, said it lowered the standing of Jews in New Zealand and added support to the Palestinian cause.