Postmarked Tehran

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The Israelis found 50 tons of munitions, here laid out on the ship's deck

Ariel Sharon stood on the dock at Israel's Red Sea port Eilat. Arrayed around him were row upon row of rifles, rockets, missiles and ammunition. Israeli commandos had snatched the weapons from a boat Israel claims was smuggling the arms to the Palestinian Authority. Sharon accused Palestinian leader Yasser Arafat of wanting to blow up the faint, remaining hopes of peace with this lethal, 50-ton haul. But it was not for Arafat, whom Sharon consistently calls a terrorist, that the Israeli Prime Minister had his bitterest words. Those he reserved for Iran, which Israel maintains was the supplier of the cache. Acts like that make Iran "the center of world terror," said Sharon.

Arafat at first denied that the Palestinian Authority had any connection to the guns Israel took off the Tongan-registered freighter Karine A. Then, pressured by the U.S. and the European Union, he ordered an inquiry that blamed three Palestinian officials. That the P.A. was involved was no shock, given the Authority's established record of smuggling arms. But the Iranian angle is something new. Last week senior Israeli officials detailed to Time their evidence of an Iranian connection to the Karine A. If indeed Iran sent arms to the P.A.--which Iran emphatically denied--Arafat would appear now to have a powerful regional backer in his struggle with Israel, a development likely to work against efforts toward peace. "An Iranian-Palestinian connection is not good news," says a U.S. official in the region, with deadpan understatement.

Commandos from Israel's Navy seals unit, Shayetet 13, swooped down on the Karine A in international waters of the Red Sea on the night of Jan. 3, catching most of the 13 crew members asleep. The Israelis say the crew told them the weapons were loaded onto the Karine A from boats off the Iranian coast in an operation headed by Lebanese Hajj Bassem, an assistant to the notorious terrorist Imad Mughniyah. A leader of the Lebanese militia Hizballah, Mughniyah has close ties to Iran and is blamed by the Americans for the 1983 bombing of the U.S. Marine barracks in Beirut. Israeli intelligence tells Time the captured captain of the ship, Omar Akawi, a maritime adviser to the Palestinian Transportation Ministry, identified a photo of Bassem as that of the man who delivered the cargo. Akawi also confessed to Israeli interrogators that the weapons were intended for the P.A.

On the ship, the Israelis say, they found the weapons in 83 giant barrels, each 12-ft. long by 4-ft. wide. The barrels had dense air pockets at each end enabling them to float and adjustable valves so that they could hang just beneath the surface of the sea. The plan, the Israelis say, was for a frogman named Salaam as-Skandari, a Palestinian trained by Hajj Bassem, to guide them to the Gaza shore. As-Skandari, along with the rest of the crew, are in Israeli detention.

Had the munitions reached their apparent destination, they would have considerably upgraded the arsenal of the P.A., which is known to have only light arms and crude mortars. Onboard the Karine A were Katyusha rockets, Sagger antitank missiles, Dragunov sniper rifles, advanced mortars and C-4 plastic explosives. The serial numbers had been scratched off the weapons to prevent identification, but Israeli officials tell Time the cargo included antitank mines and rocket-propelled grenades of a design manufactured only in Iran.

Though Arafat once had solid ties with Iran, the Islamic regime turned its back on him in 1993 when he signed the Oslo peace accord with Israel, which Tehran regards as anathema. Iran focused its attentions instead on Hizballah, which for years fought Israeli soldiers occupying southern Lebanon. That battle lost its ferocity in May 2000, when Israel pulled out of Lebanon. The new Palestinian intifadeh, now 15 months old, offered Iran a fresh opportunity to export extremism. First, Iran's proxy Hizballah set up its own infrastructure in the West Bank and Gaza. Then, early last year, Iran organized closer cooperation between Hizballah and the Palestinian extremist group Hamas. Recently, senior Palestinian sources tell Time, Hizballah put officials from Arafat's Authority on Iran's payroll. Both Israeli and Palestinian officials say Iran wants to broaden the intifadeh to include as many Palestinian groups as possible in order to sink the peace process with Israel once and for all.

Many Palestinians fail to see what all the fuss over the guns is about. "I don't see why the Palestinians are being so defensive about it," says Ghassan Khatib, a leading Palestinian political analyst. "It's a war. Why is everybody entitled to defend themselves except us?" Certainly there are parallels between the arms smuggling by Palestinians today and similar efforts in the 1930s and 1940s by Jewish leaders in Palestine who were struggling against British occupiers. Those operations are regarded as heroic in Israel. The difference, Israelis argue, is that they are supposed to be in a peace agreement with the Palestinians, one that pledges both sides to resolving disputes through negotiation and limits the arms the P.A. is entitled to have. On the other hand, the Israelis themselves have repeatedly violated the peace accords, not least of all by reoccupying territory ceded to the P.A.

The Israeli response is that the Palestinians started it. From the beginning, Israelis say, Arafat's people have violated the agreements by sneaking in arms. In 1995 Israel agreed to allow Arafat's men 240 heavy machine guns, in addition to light personal weapons. Now the Israelis say the Palestinians have hundreds more than that, many smuggled in on Arafat's own helicopters. Surveillance drones that Israel uses to keep tabs on Arafat recorded his aides' carrying heavy machine guns off the choppers "on dozens of occasions," according to a high-ranking Israeli army officer.

Israeli security officials say some holders of VIP cards, issued by the Israelis to top Palestinian officials, used their ability to travel with few checks across the bridges from Jordan to smuggle arms, until Israel cracked down during the intifadeh. Tunnels dug 50 ft. below the sandy border between the Gaza Strip and Egypt have also served as conduits for arms. Israeli troops found two such tunnels last week and destroyed them. Last May Israel intercepted a boat headed to the Gaza Strip and discovered a haul that included Strella shoulder-launched ground-to-air missiles--the Russian equivalent of the Stinger. In case other Strellas have got through before or since, Israel's air-force helicopters are under orders to fly with massive floodlights trailing behind them whenever they are over the West Bank and Gaza Strip. The lights glow at a temperature higher than that of the helicopter's engine, so as to attract heat-seeking missiles away from the chopper.

With that history, Israelis have been infuriated by the muted world reaction to the Karine A seizure. It took a visit to Washington by a high-ranking delegation from Israeli military and naval intelligence to get the State Department to link Arafat's Authority to the arms, though the U.S. won't tie Arafat directly to the boat. Arafat's advisers say he expects the U.S. to use his embarrassment over the Karine A to make him crack down on Hamas and another violent group, Islamic Jihad, a long-standing demand by Israel and the U.S. "I don't envy him," says an Arafat aide. "He's very isolated."

Still, it's hard to imagine the P.A.'s giving up on gunrunning altogether. The three men blamed for the Karine A operation--Fathi Razem, deputy chief of Arafat's navy; Fuad Shubaki, head of finance for the National Security Force; and Adel Mughrabi, a naval officer--are in Arafat's jails now. But there was sublime hypocrisy in that. The panel that fingered them was headed by Abdel Razak Majaideh, head of the National Security Forces in Gaza. Last year, according to senior Palestinian security sources, Majaideh was discovered to have been running a mortar factory in Gaza and selling his bombs to the highest bidder.

--With reporting by Massimo Calabresi/Washington and Jamil Hamad and Aharon Klein/Jerusalem