The newspaper cited a secret U.S. government report outlining spying activities by Israelis that it said contained "elements (that) support the theory that Israel did not give the U.S. all the information it had about the planning for the September 11 attacks."

In Washington, however, U.S. law enforcement officials discounted the report, with one calling the assertion of a spy ring "a bogus story."

Le Monde said the secret study said the Israelis posed as graphic arts students and tried to enter buildings belonging to the Drug Enforcement Administration and other U.S. agencies.

Intelligence Online, a Paris-based newsletter that reported on the study Monday, said some 120 Israeli spies had been arrested or expelled and inquiries were continuing.

Asked by Reuters Monday about the Intelligence Online report, an FBI spokesman flatly called it a "bogus story." The spokesman said: "There wasn't a spy ring."

In Washington on Tuesday, U.S. Justice Department spokeswoman Susan Dryden said of the Le Monde report, "At this time, we have no information to support this."

U.S. officials said some Israeli students had been sent out of the country for immigration violations, not for spying.

In Israel on Monday, a spokesman said the prime minister had no comment on the matter.

Le Monde reported Intelligence Online's findings and added elements it said its reporters had uncovered.

"A vast Israeli espionage network operating on American territory has been broken up," it wrote.

The French newspaper described it as the biggest Israeli spy case in the United States to be made public since 1986, a reference to the life sentence given Jonathan Pollard, an American Jew who passed U.S. military secrets to Israel.

The Pollard affair strained relations between the United States and Israel, two traditionally close allies.

Guillaume Dasquie, editor of Intelligence Online, told Reuters Monday the report did not specify exactly what information the alleged agents were seeking.

"The report shows the clandestine network was engaged in several intelligence operations. It was a long-term project," he said.

Le Monde said it published excerpts from the introduction of the June 2001 report, including a comment that the women in the spy ring were "usually very attractive."

AL QAEDA LINK?

Le Monde said more than one third of the suspected Israeli spies had lived in Florida, where at least 10 of the 19 Arabs involved in the Sept. 11 airplane attacks on New York's World Trade Center and the Pentagon also lived.

At least five of the spies resided in Hollywood, Florida, where alleged hijacker Mohammad Atta and four accomplices in the attacks also lived, the paper said.

The United States holds Saudi-born Osama bin Laden's al Qaeda network responsible for the September attacks.

Two Israelis lived in Fort Lauderdale, near Delray Beach, where hijackers in the planes that crashed into the Pentagon and in Pennsylvania resided temporarily, the report added.

"This concordance could be the source of the American view that one of the missions of the Israeli 'students' could have been to track al Qaeda terrorists on (U.S) territory without informing federal authorities," Le Monde said.

The newspaper said it had seen a copy of the secret report, and that it had learned that six suspected spies had used portable telephones bought by a former Israeli vice consul in the United States.

Both Le Monde and Intelligence Online said the DEA had confirmed the existence of the report drawn up for the Justice Department by the drug agency together with the Immigration and Naturalization Service, the FBI and the U.S. Air Force. A spokesman for the U.S. anti-drug agency was not immediately available for comment.

Intelligence Online said the suspects, all between 22 and 30, had recently completed their Israeli military service and one was related to a two-star Israeli general. It named several of the Israelis it said had been arrested.

The inquiry began in February 2001 and is still continuing, it quoted the report as saying.

Copyright © 2002 Reuters Limited

###