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If this story is the one based on the French Report...

French Reports: U.S. Busts Big Israeli Spy Ring Tue Mar 5,12:44 PM ET

PARIS (Reuters) - 'The United States has broken up a huge Israeli spy ring that may have trailed suspected al Qaeda members in the United States without informing federal authorities, the French daily Le Monde reported Tuesday.

A secret U.S. government report outlining spying activities by Israelis contained "elements (that) support the theory that Israel did not give the U.S. all the information it had about the planning for the Sept. 11 attacks," it wrote.

Le Monde said the U.S. Drug Enforcement Administration had confirmed the existence of the secret study, which says the Israelis posed as graphic arts students and tried to enter buildings belonging to the DEA 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 called it a "bogus story." The spokesman said: "There wasn't a spy ring." U.S. Justice Department spokeswoman Susan Dryden said on Tuesday in response to 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 Monday, a spokesman told Reuters: "The prime minister's office declines to comment on this matter." Le Monde Tuesday 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," Le Monde 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.'

It's the bogus Fox story, recycled. Follow the link for the rest...(-:

Fox News Wednesday, December 12, 2001 Carl Cameron:

Numerous classified documents obtained by Fox News indicate that even prior to Sept. 11, as many as 140 other Israelis had been detained or arrested in a secretive and sprawling investigation into suspected espionage by Israelis in the United States.

Investigators from numerous government agencies are part of a working group that has been compiling evidence in the case since the mid-1990s. These documents detail hundreds of incidents in cities and towns across the country that investigators say quote "may well be an organized intelligence-gathering activity."

Investigators are focusing part of their efforts on Israelis who said they are art students from the University of Jerusalem or Bezalel Academy and repeatedly made contact with U.S. government personnel by saying they wanted to sell cheap art or handiwork.

Documents say they "targeted" and penetrated military bases, the Drug Enforcement Administration, the Federal Bureau of Investigations, dozens of government facilities and even secret offices and unlisted private homes of law enforcement and intelligence personnel.

Another part of the investigation has resulted in the detention and arrest of dozens of Israelis working at kiosks in American malls, where they had been selling toys called "Puzzlecar" and "Zoomcopter."

Investigators suspected a front. Shortly after the New York Times and Washington Post reported the detentions of Israelis on immigration charges last month, the carts began vanishing.