Israeli Foreign Minister Shimon Peres was involved as prime minister in a secret meeting in Switzerland with an Iranian arms dealer in March 1986, the newspaper Zurich Sonntagsblick alleged in an article published Sunday.
The purpose of the meeting was to work out a snag that developed in a $36 million deal for Israel to sell Iran 3,000 American anti-tank missiles in exchange for the release of two Israeli soldiers and five Americans held hostage by pro-Iranian terrorists in Lebanon, the newspaper claimed.
The story may shed light on what has become known as the Iran-Contra scandal involving the United States, Israel and the Nicaraguan Contra rebels, who are alleged to have received part of the proceeds of the arms sale from Israel.
The Sonntagsblick alleged that Bernhard Stoll, head of the secret service department of the Swiss Ministry of Defense in Bern, organized meetings between an Israel secret service agent known as Jonathan Alexander and the arms merchant, Hamid Nagashian.
An agreement was reached on the sale early in 1986, the newspaper said. The money and documents were to be handled by a firm in Luxembourg, Kalydon, a Geneva bank and a West German arms dealer, Karl-Heinz Oettershagen.
But the Iranians wanted to test the quality of the missiles and later seemed hesitant about the exchange. Stoll arranged a meeting between Nagashian and Peres at which Stoll, Alexander and several Swiss secret service agents were present.
It took place in the VIP lounge at Kloten Airport in Zurich on March 14, 1986, the Sonntagsblick said. Peres was on his way to the funeral in Stockholm of assassinated Swedish Prime Minister Olaf Palme.
The newspaper reported that police found bank checks totalling $36.25 million from Iran to Israel in a raid on the home of Oettershagen.
A spokesman for the Defense Ministry in Bern, Rudolf Strasser, said the entire story was untrue. However, he admitted Monday that Stoll had met with a high-ranking Israeli at Kloten.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
