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Australia's domestic spy agency, ASIO, briefed senior Labor figures yesterday on the reasons behind the expulsion of the Israeli diplomat from Canberra a month ago.
The expulsion of Amir Laty has been shrouded in secrecy.
The Foreign Minister, Alexander Downer, said this week it was "an issue that we've chosen not to comment on".
Mr Laty left Canberra suddenly at the request of the Government, which told Israeli officials that if the diplomat did not withdraw voluntarily he would be declared persona non grata and deported.
The Herald understands he has not told even his closest friends in Canberra the reason for his sudden departure.
The claims have emerged in a debriefing that Amir Lati reportedly gave to the Israeli Foreign Ministry.
THE Israeli diplomat at the centre of a spy scandal has claimed his friendship with Attorney-General Philip Ruddock's youngest daughter, Caitlin, was behind a decision to expel him from Australia.
Mr Lati, the second secretary at the Israeli embassy in Canberra, claimed he was invited to attend Christmas lunch at the Ruddocks' Pennant Hills home in Sydney's northwest last year, but was barred after the Government began moves to expel him.
ANOTHER Israeli diplomat's future in Australia is in doubt following allegations he was involved in a sex scandal in South America five years ago.
The claim comes after Israeli diplomat Amir Laty in December was thrown out on national security grounds.
Mr Laty had rekindled a friendship with the daughter of Attorney-General Philip Ruddock and had been due to spend Christmas with the Ruddock family, before authorities ordered his expulsion.
The office of Attorney-General Philip Ruddock last night denied Mr Laty's claim he had been sent home because of his relationship with Mr Ruddock's 26-year-old daughter Caitlin.
Now, Australian Jewish leaders have protested against the appointment of Aryeh Scher as his replacement.
Amir Laty, expelled on December 28, even targeted journalists in the hope of cultivating young women with access to government secrets.
"It was an attempt at high-level espionage," a national security source said.
Apart from Laty's friendship with Attorney-General Philip Ruddock's 26-year-old daughter Caitlin, he is also believed to have had liaisons with a woman from the Defence Intelligence Organisation and another from the Prime Minister and Cabinet Office's international policy unit.
Intelligence experts claimed he used the "honeypot" method, pretending a love interest to entrap woman in middle-level intelligence organisations.
Israeli President Moshe Katsav arrives in Australia on Monday.
A FEMALE adviser in the Prime Minister's department who became a lover of expelled Israeli spy Amir Laty blew the whistle on him to ASIO, The Daily Telegraph can reveal today.
The 27-year-old Brisbane woman held a position in the highly sensitive office of Prime Minister and Cabinet.
Yesterday, as a diplomatic row with Israel began to fester, its President Moshe Katsav, made the unprecedented step of approaching The Daily Telegraph to stress the affair would not affect his forthcoming visit to Australia or relations with this country.
But his own government in Israel is so concerned about Laty's motivations in Australia, the junior diplomat has been forced to undergo lie-detector tests during an interrogation.