Israel will have to try harder says Clark

Israeli head of state Moshe Katsav has expressed sorrow and regret over the passport fraud affair involving two alleged Israeli spies.

The President's comments were made in an interview on the Australian Nine Network's Sunday show yesterday - and also broadcast on Prime TV in New Zealand - before his visit to Australia starting today.

A spokesman for Prime Minister Helen Clark said the comments were "very encouraging".

But they appear to fall well short of the Government's demands for an explanation over the affair and assurances it will not happen again.

President Katsav's role in Israel is largely that of a figurehead.

Real power lies with Prime Minister Ariel Sharon.

Helen Clark's spokesman said the matter was still being "progressed" through diplomatic channels.

New Zealand imposed diplomatic sanctions on Israel when Eli Cara and Uriel Kelman, suspected Mossad agents, were jailed for six months last year for stealing the identity of a tetraplegic man to obtain a false New Zealand passport.

One of the sanctions was barring President Katsav from coming to New Zealand should he request a visit - and he has not done so.

The President told Sunday: "I am very sorry about the last development in our relations with New Zealand. For us New Zealand is a good friend of Israel and I really regret what happened."

He said the two Israelis stood trial, they were punished by New Zealand authorities and imprisoned for a few months.

"But again, I really hope that this problem is closed and I want to close this chapter in our relation with New Zealand. I can express my sorry [sic] and my regret."

The statement will be pored over by New Zealand diplomatic officials but the Government will not be satisfied until the Israeli Government comes clean over the affair.

Last year Helen Clark called it an "utterly unacceptable breach" of international law and New Zealand sovereignty.

The Herald reported last week that the Government had rejected a draft "statement of regret" Israel wanted to tender in place of an outright apology.

The Prime Minister wants a "triple-A" apology before diplomatic relations will be restored, in which Israel would admit its culpability for Cara and Kelman's actions.

New Zealand wants an apology for the breach of its sovereignty, an explanation for what the agents wanted to do with the passports and an assurance that Israeli agents will not try the same thing again.

This month Cara and Kelman dropped their appeals against their convictions.

They left the country in September after being released from prison half-way through their sentences.

President Katsav was also asked about Canberra-based Israeli diplomat Amir Laty, who Israeli media said visited Cara and Kelman while they were in jail in New Zealand.

Mr Laty quit Australia after being asked to leave by the authorities in December following alleged liaisons with women, including a friendship with Attorney-General Philip Ruddock's daughter Caitlin.

President Katsav defended Mr Laty, saying that to the best of his knowledge he was not involved in any illegal or inappropriate activity.

The issue was behind both countries and he said he had no intention of raising it during talks with Australia's leadership and authorities.

President Katsav's visit - the first by an Israeli President to Australia for 18 years - is going ahead amid tight security.

His engagements include a lunch hosted by Prime Minister John Howard and a state dinner with Governor-General Michael Jeffery.