He was also caught up in another intelligence problem following the arrest and expulsion of the military attache at the Israeli Embassy in Moscow, Col. Vadim Leiderman, on charges of espionage.

Neither the Russians nor the Israelis shed any light on the case, beyond saying Leiderman was arrested May 12 at a meeting in a Moscow restaurant, interrogated and given 48 hours to leave Russia.

The Israeli Defense Ministry would only say that the Russian allegations were "unfounded." The liberal Haaretz daily reported that Israeli authorities imposed a news blackout on the case that was lifted Wednesday evening.

There have been several instances of Russia accusing Israelis of spying in recent years. These have generally been linked to Moscow's nuclear cooperation with Iran, a country Israel sees as an existential threat, and with arms sales to Iran and Syria.

Israel claims both states provide missiles and other weapons to their proxy, Hezbollah, in Lebanon.

But it is the case involving Uzi Arad, one of Netanyahu's closest allies, that is the most politically bothersome and of much longer standing.

It could embarrass the hawkish Israeli leader during his crucial visit to Washington and reopen damaging rifts with the Americans.

U.S. President Barack Obama is striving to bolster the flagging peace process, due in large part because of Netanyahu's refusal to make key concessions to the Palestinians proposed by the Obama administration, and to revive the United States' waning influence in the Middle East.

Israel's General Security Service, known as Shin Bet, found that Arad, a prominent right-wing hawk, was responsible for the leakage of sensitive security information to the media in July 2010 which caused a major crisis with the Obama administration.

The leak asserted that the United States and Israel had reached substantive understandings in secret talks in June 2010, with Washington giving Israel unequivocal guarantees that its "strategic capabilities" in the nuclear field would be preserved and strengthened.

Washington was outraged and demanded the leaker be identified. Netanyahu complied. Arad resigned in February and insisted the leak was unintentional, but Shin Bet stripped him of his high-level security clearance.

Israeli lawmakers are now demanding to know why Arad was not indicted.

Arad, a former director of intelligence with the Mossad, Israel's foreign intelligence service, is well known in Israel's foreign policy, security and strategic circles.

He has made political waves with his voluble support for Netanyahu's advocacy of Israeli pre-emptive strikes against Iran's nuclear facilities, despite U.S. objections to military action.

He also has been implacably opposed to Palestinian statehood.

These high-octane views made Arad many enemies among Israeli leaders across the political spectrum, and in Washington.

But Netanyahu has remained fiercely loyal to him. In April 2009, Netanyahu, starting his second time as premier, appointed him his national security adviser.

The appointment did not go down well in Washington, where the State Department had denied him an entry visa for two years, citing "espionage and sabotage" provisions in U.S. immigration laws, because he was linked to a Pentagon spy case involving the Israelis.

He had been tied to Lawrence Franklin, who was accused of passing U.S. intelligence on Iran to Israeli officials in Washington and the powerful Israel lobby, the American Israel Public Affairs Committee, in 2003-04.

Franklin was sentenced to 12 years' imprisonment in January 2006, later reduced to 10 months' house arrest.

Two AIPAC executives, Steve Rosen and Keith Weissman, were charged with illegally disclosing highly sensitive national defense information to a foreign power. But charges against them were dropped in May 2009.

Arad was also reportedly linked to Naor Gilon, former head of the political department at the Israeli Embassy in Washington who was involved with Jonathan Pollard, a U.S. Navy analyst sentenced to life imprisonment March 4, 1987, for passing high-value U.S. intelligence to Israel in 1984-85.

Pollard's arrest caused a major rift between Israel and its strategic ally and benefactor, the United States.

Israel pledged never to spy on the Americans again, but there have been several cases involving alleged Israeli spies in the United States since then.

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