Seventeen people, including a retired Israeli general, were indicted yesterday in New York on federal charges of conspiring to sell Iran more than $2 billion worth of American weapons -- including missiles, helicopters, tanks and fighter jets.

At a news conference in New York, U.S. Customs Commissioner William von Raab described the defendants as "brokers of death who operated a terrorist flea market." Five of the suspects, including retired Gen. Abraham Bar-Am, were arrested Monday in Bermuda where they allegedly had gone to complete a contract.

U.S. Attorney Rudolph W. Giuliani called the scheme, illegal under a U.S. arms embargo against Iran, "mindboggling in scope." He said that it was not known whether the Israeli government was involved or was aware of the scheme and that the Israeli government was not asked to participate in the investigation.

Yossi Gal, a spokesman for the Israeli Embassy here, said, "The government of Israel has no connection or involvement with the matter." At least two U.S. officials said there is "circumstantial evidence" that Israeli government officials may have known of the plot.

Bar-Am, 52, was described in court documents as a 30-year veteran of the Israeli army. The indictment said he is in the reserve officer corps as an adviser to the Northern Army Command in Israel.

Those named in criminal complaints filed in U.S. District Court in Manhattan were four West Germans, four Americans, two other Israelis, two Greeks, a Frenchman, a Briton and two not identified by nationality.

The indictment lists five separate conspiracies to obtain U.S. arms from other countries and sell them to Iran in violation of the U.S. Arms Export Control Act. Giuliani said the scheme, believed to have started in early January, included the proposed sale to Iran of about $800 million worth of American arms delivered to Israel.

"The Iranians would have used these weapons to make war against their neighbors or to spread international terrorism against the free West . . . , " von Raab said. "Without a doubt, the bloody hand of international terrorism would have been on the trigger of the TOW [antitank] missiles -- really, an ideal weapon for this dirty business."

Iran has been at war with Iraq for nearly six years. In 1980, then-Israeli Defense Minister Ariel Sharon said Israel had sold Iran about $12 million worth of spare parts, including tires for F4 Phantom warplanes. When the State Department objected, Israel said the sales had been stopped.

According to the indictments, the conspiracies included the planned sale of 15,000 TOW missiles, dozens of F4 and F5 fighter jets, five C130E Hercules transports, 46 Skyhawk fighter-bombers, 30 Sparrow guided missiles, 200 AIM guided missiles, 200 Maverick guided bombs, 600 Chaparral missiles and other military hardware.

The indictment said the lighter equipment was to be flown to Tabriz, Iran, and the heavier gear was to be shipped to Bandar el Abbas, Iran. The defendants allegedly obtained "end-user" certificates from Turkey and the Philippines to make it look as if the goods were bound for "friendly" nations.

In addition to complete weapons packages, the planned sales included spare aircraft engines, reconditioned aircraft, cluster bombs, recoilless rifles and M48 tank engines.

Besides Bar-Am, the defendants were identified as Israelis Guri Eisenberg, 31, and Israel Eisenberg, 55; Americans Samuel Evans, 50, of London, William Northrop, 41, of Tel Aviv, Nickos Minardos of Beverly Hills, Calif., and John DeLaroque of France; French citizen Bernard Veillot; West Germans Hans Bihn, Ralph Kopka, Hans Schneider and Herman Moll, 29, of London; Briton A.R. Flearmoy, 65; and Greek citizens Kourentis Dimitrios-Alexandros and Staboulopoulos Thanos; and two men identified only as "Mr. Hebroni" and "Mr. Humposa."

In addition to the five arrested in Bermuda, four were arrested in the New York area, and eight are being sought. Each faces up to five years in prison and a $250,000 fine if convicted.