If this is true, it is not the first time this same Iranian Embassy has been used for such a purpose, e.g., US hostages were held in the the early-mid eighties but never confirmed in the media - the score to settle with Iran by the US goes from this embassy to the American Embassy taken over....
I think it could very well be true. However, I have no real way of knowing, because there's no source for a news agency given.
I do like the site linked to though. Seems very pro-Israel. :)