Report: Israel, Iran holding debt talks

By MATTI FRIEDMAN, Associated Press Writer

While Iran continues to deny that Israel has the right to exist, representatives of the two countries are holding clandestine talks in Europe to settle an old Israeli debt, a newspaper reported Wednesday.

Iran is still owed hundreds of millions of dollars for oil it supplied to Israel in the years before the Islamic Revolution in 1979 and the two countries, now sworn enemies, are holding contacts meant to settle the debt, according to the report in the daily Haaretz citing anonymous Israeli and Swiss officials involved in the negotiations.

Israel and Iran had a close relationship in the 1950s, 60s and 70s, when Iran was ruled by the pro-Western Shah. Israeli companies were given large construction contracts in Iran, the countries cooperated on security and weapons development, and, according to the report, a joint Israeli-Iranian company, Trans Asiatic Oil Ltd., supplied Iranian oil to Israel.

In 1979, when Shiite clerics ousted the Shah, Iran cut off all contacts with Israel, leaving an Iranian debt to Israeli companies for services rendered and a much larger Israeli debt to Iranian oil suppliers, according to the report.

Two mediation processes involving different parts of the debt are now ongoing between Iranian and Israeli representatives, the report said, and a third ended recently in a ruling that Israeli fuel companies owe Iran tens of millions of dollars.

The Israeli Foreign Ministry and international mediation concerns in Geneva refused to comment.

Iranian President Mahmoud Ahmedinejad has repeatedly denied that Israel has the right to exist and has called for the destruction of the Jewish state. Israel fears that Iran’s nuclear program is intended for that purpose.

The final paragraph (above) is not true. See related articles – kf

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