Israel has reportedly planted mobile phone spying devices near the White House and other sensitive locations in the US capital Washington DC over the past two years.
The serious allegations were made in a report in American news site Politico, based on anonymous accounts provided by three former US officials.
The FBI and other intelligence agencies felt "confident" that Israeli agents were responsible for the espionage, although fell short of declaring whether or not the Israelis were successful in their effort. The agencies are said to have used sophisticated forensic analysis of the devices, known as StingRays.
One former senior intelligence officer went as far as to say, "It was pretty clear that the Israelis were responsible".
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However Elad Strohmayer, a spokesperson for the Israeli embassy in Washington, dismissed the accusations as "absolute nonsense" denying any espionage activities carried out in the US by Israel "period".
The office of Israeli Prime Minister Benjamin Netanyahu – who is currently fighting for political survival in the upcoming do-over elections – has dismissed the report as "a blatant lie".
It is unclear if there will be any reaction from the US, with one source disclosing, "I'm not aware of any accountability at all."