Israeli officials denied a CBS News report that a highly placed Israeli mole passed to Israel sensitive documents about US policy on Iran. August 28, 2004 - Israel rejected as “false” a CBS report that FBI was investigating a highly placed Israeli mole who is suspected of having passed sensitive documents about US policy on Iran to Israeli officials. In Washington, David Segal, spokesman for Israeli Embassy said the report was “outrageous and false.” In Jeruslam, Yuval Steinitz, chairman of the Israeli parliament’s Foreign Affairs and Defense Committee, denied that Israel was spying on the US. He said, “Israel is very concerned ... that the ayatollahs will acquire nuclear weapons because this is an unpredictable regime with close network to terror organizations around the world.” US officials refused to name the suspect, but said the person is an analyst in the office of Douglas Feith, undersecretary of defense for policy and the Number Three official in the Pentagon, CBS News reported on Friday. The US news media characterized Feith as having close ties with Israel. He prepared a policy paper for former Israeli Prime Minister Benjamin Netanyahu before Netanyahu’s election in 1996, and is a former law partner of Israeli-American attorney Marc Zell. CBS News said it was told of wiretaps, undercover surveillance and photographic evidence documenting the passing of evidence from the suspected spy to two people who work for the American Israeli Public Affairs Committee (AIPAC), a powerful pro-Israeli lobby in Washington. CBS said according to its sources, the suspected spy handed over a presidential directive on Iran while it was still in the draft phase. The sources said this put Israel “inside the decision-making loop” and could help them influence the eventual outcome.