HUNT FOR A MOLE

In the 11 years since former Navy analyst Jonathan Jay Pollard was convicted of selling U.S. military-intelligence documents to Israel, both Jerusalem and Washington have worked hard to heal the wounds from that spy scandal. But apparently both countries are still stealing secrets from each other. Last week the Washington Post revealed that the National Security Agency's electronic snoopers, which had been listening in on the phone conversation of an Israeli intelligence officer, uncovered tantalizing evidence that Israel may have a mole even better placed than Pollard was: a senior U.S. official code-named "Mega" who may be passing on U.S. diplomatic intelligence.

The White House, which was shaken as much by the fact that the story had leaked as it was over the prospect of another Israeli spy, refused all comment. Israeli Prime Minister Benjamin Netanyahu's office denounced the report as "totally baseless." Added Eliahu Ben-Elissar, Israel's ambassador in Washington: "Certainly after the Pollard affair, we would have been crazy to spy on the U.S."

But not crazy enough to go cold turkey, say U.S. intelligence officials. The FBI, which is investigating the Mega case, has grumbled privately that Israeli espionage agents routinely prowl California's Silicon Valley and Boston's Route 128 corridor for high-tech secrets. "The Israelis were bumping into very nearly every one of our friends and allies doing the same thing," says a former FBI counterintelligence agent. In a report last year to the Senate Intelligence Committee, the CIA identified Israel as one of six foreign countries with "a government-directed or -orchestrated clandestine effort to collect U.S. economic secrets." Senior intelligence officials tell TIME that last year U.S. Ambassador Martin Indyk complained privately to the Israeli government about heavy-handed surveillance by Israeli intelligence agents, who had been following American-embassy employees in Tel Aviv and searching the hotel rooms of visiting U.S. officials.

So far the only evidence the FBI has of another mole is the intercepted phone conversation. During the call, the Israeli intelligence officer in Washington and his superior in Tel Aviv are discussing how they can get their hands on a Jan. 16 letter then-Secretary of State Warren Christopher wrote to Palestinian leader Yasser Arafat. The private letter spelled out U.S. guarantees for Israeli troop withdrawals from the West Bank. The Israeli official in Washington suggested going to Mega for a copy of the letter, but his superior rejected the idea. "This is not something we use Mega for," the Israeli supervisor said, according to the NSA transcript of the call.

Who Mega is, or even if he's a true spy, remains a mystery. He could be a senior State Department aide in Washington who handled the Christopher letter, say intelligence sources, or a U.S.-embassy employee overseas. Or as Netanyahu aides suggested, the two Israeli officials may have been having an innocent conversation about a friendly U.S. official they went to from time to time for information. Mega may not be a code word for a spy but rather a nickname, which Israelis often use for American officials with whom they work.