Israeli Prime Minister Shimon Peres has sent a message to Secretary of State George P. Shultz offering to return any documents stolen from the United States if the documents are found to be in Israel's possession, official sources confirmed today.
The prime minister's message, the sources said, also assured Shultz that Israel will abide by a 1983 agreement between the two countries not to conduct espionage operations against each other, but stopped short of an apology, saying that an internal investigation is still under way.
A U.S. Navy intelligence analyst, Jonathan Jay Pollard, has been arrested and accused of selling government secrets to Israel.
The message was conveyed by Peres in a meeting Wednesday night with U.S. Ambassador Thomas Pickering, official sources said. The sources said the message was not in written form.
The message, informed Israeli sources here said, did not settle the issue of whether U.S. federal law enforcement officials will be permitted to question two Israeli diplomats who returned to Israel earlier this week before they could be reached by U.S. investigators for questioning in the Pollard case.
Official Israeli sources said that no consideration is being given to sending Ilan Ravid, a scientific attache assigned to the Israeli Embassy in Washington, and Yosef Yagur, a scientific counsel to the Israeli Consulate in New York, back to the United States for questioning by the FBI. The sources said that Ravid, who reportedly returned to Jerusalem Monday, and Yagur, who returned Wednesday, retain diplomatic immunity and that that principle of international diplomacy will not be surrendered under pressure from Washington.
Peres was said to be considering either allowing FBI agents to "interview" the two diplomats here, or having them submit detailed affidavits, which would be sent to Washington.
Peres' message to Shultz was in response to the U.S. secretary of state's written demand for information on when the alleged spying operation by Pollard began, what stolen documents were sent to Israel, whether Israel has conducted espionage operations in the United States, and what Israel intends to do about the two recalled diplomats.
Amid continuing official silence about the case, Peres, Foreign Minister Yitzhak Shamir and Defense Minister Yitzhak Rabin have been holding daily meetings to decide how to make disclosures of the Israeli intelligence operations with the least amount of damage to Israel's image in the United States and to the delicate political balance of the already strained national unity government.
But some Israeli officials took the offensive, accusing the United States of conducting espionage activities here, the Los Angeles Times reported. The newspaper quoted one government official, who asked that his name not be published, as saying: "We know the Americans are doing the same here." A defense source said, "Look at the sea of antennas on top of the American Embassy. All of them certainly are not to transfer regular diplomatic messages."
A central figure in press reports about the Pollard case has been Rafael (Rafi) Eitan, a former adviser on terrorism to both Peres and his predecessor, Menachem Begin. Informed Israeli sources say he is still associated with intelligence operations. Eitan, who is not related to the former Army chief of staff with the same name, is a former operations chief of Israel's external intelligency agency, Mossad.
Eitan is a close political ally of Israeli Trade Minister Ariel Sharon and was his assistant when Sharon served in the mid-1970s as security affairs adviser to Rabin, who was then prime minister.
Members of Peres' Cabinet, who met last night to discuss the political ramifications of the Pollard affair, were said to have expressed concern about Sharon's possible reaction if any attempt is made to link Eitan officially with espionage activities in the United States.
Sharon, who has been on a speaking tour to South America and the United States, nearly precipitated a collapse of the government earlier this month when he refused to apologize and retract statements he had made criticizing Peres' efforts to initiate peace negotiations with Jordan.
Eitan has denied any involvement in the Pollard case, and no evidence has been presented publicly yet linking him to espionage activities in the United States.
There have been published, but as yet uncomfirmed, reports that Eitan secretly heads an intelligence wing of a scientific data-gathering office here called the Science Liaison Bureau, and known by its Hebrew abbreviation, LEKEM.
Israeli sources said that Eitan, after leaving his post in the prime minister's office in October 1984, continued in intelligence work at several levels: maintaining his association with Mossad, working with LEKEM employes based abroad and continuing his interest in counterterrorism intelligence.
Informed sources said that although he is officially out of public life, Eitan continues to maintain a loose association with those three activities.
With the advent of the national unity government, Peres named Amiram Nir, a Labor Party loyalist, to succeed Eitan as his adviser on terrorism.
A senior government source said that Peres then turned his attention to Nir and was not aware of any espionage activities in the United States that may have been carried out outside his control
"You know, when you govern so many things, you also discover things you cannot govern. Whoever did it thought that this is not spying against the United States, but spying in the United States against Arabs. And then, maybe, it was done. It was a mistake," the senior official said.
He added, "But when things like this happen, you review all the details. We don't have a problem with our major policy" of not spying in the United States. "Rather this is an escape from our policy."
The source said that Peres could not be expected to know the details of every covert operation conducted by Israel and that the prime minister was stunned by the disclosures of Pollard's alleged activities.
LEKEM conducts research in science and high technology and is openly listed in government agency directories. It routinely posts its employes to foreign capitals to gather data on science and technology developments, a government source said.
According to official Israeli sources, even though LEKEM employes are registered as Israeli Embassy staff members, they report not to the Foreign Ministry but to LEKEM headquarters.
The official declined to discuss any aspects of LEKEM's activities in the United States or comment on published reports that the office gradually has evolved into an independent annex of Israel's primary intelligence-gathering organization, the Mossad, and the military intelligence apparatus.
Official sources said a debate was under way in the government over how and when to make public findings of an internal investigation that already has produced at least one interim report given to U.S. officials.
Concern has been growing that incalculable damage already has been done to Israel's standing with the American public and among pro-Israel members of Congress.
Deputy Prime Minister David Levy said today that the Pollard affair has not in any way harmed U.S. interests or security, and he called on the Reagan administration to present a "balanced picture" to the American public and bring the controversy to an end.
Saying that he does not believe the Reagan administration is interested in exploiting the affair to spoil U.S.-Israeli relations, Levy told the Itim News Agency that the Israeli government had apologized to the United States and was making an effort to investigate the case.