Iranian-Israeli secret talks in Europe to settle old debt

Iranian and Israeli officials are holding secret talks in Europe to settle an old Israeli debt, an Israeli newspaper reported, quoting unidentified officials.

Iran, which denies Israel’s right to exist, is still owed hundreds of millions of dollars for oil it provided to Israel before the 1979 Islamic Revolution.

According to Haaretz, representatives from both countries are holding clandestine talks to settle the debt.

The report, attributed to anonymous Swiss and Israeli officials involved in the secret negotiations, stated that two mediation processes involving different parts of the debt are now taking place between Iranian and Israeli officials.

A third process recently ended with a ruling that Israeli fuel firms owe Iran tens of millions of dollars.

Iran and Israel had a close relationship when Tehran was ruled by the pro-Western Shah (King) until the late 1970s. Israeli firms were granted large construction contracts in Iran, the two countries co-operated on security and weapons development, and, according to the Haaretz report, a joint Israeli-Iranian company, Trans Asiatic Oil Ltd., supplied Iranian oil to Israel.

In 1979, when Shia clerics toppled the Shah, Iran severed its ties with Israel, leaving an Iranian debt to Israeli firms for services rendered and a much larger Israeli debt to Iranian oil suppliers, according to the report.

The Israeli Foreign Ministry and international mediation concerns in Geneva refused to comment on the report, while Iran’s mission to the United Nations dismissed it as "unfounded and totally false.”

The Iranian mission also accused Haaretz of "quoting fictitious sources" to divert attention from the atrocities committed by Israel in the Gaza Strip and the occupied West Bank.

Iranian President Mahmoud Ahmadinejad has repeatedly denied that Israel has the right to exist and has called for the destruction of the Jewish state.

Israel, backed by the United States, claims that Iran is pursuing a covert nuclear weapons program, despite Tehran’s insistence that its atomic plans are strictly aimed at the peaceful generation of electricity.