Switzerland said Thursday it had caught Israel's spy agency in an attempt to bug telephones on the outskirts of the Swiss capital. It was the third highly publicized Mossad bungle to embarrass the Israeli government in recent months, and angered Swiss leaders.

"The least Israel can do is apologize quickly," said spokesman Franz Egle of the Swiss Foreign Ministry, which formally protested the alleged bugging attempt as a violation of national sovereignty.Israel radio said the Israeli agents were trying to eavesdrop on Iranian diplomats, but Swiss officials denied the report, saying the targets were neither Iranian nor diplomats.

Switzerland's announcement came two days after the head of Mossad, Danny Yatom, resigned in the aftermath of the spy agency's failed Sept. 25 assassination attempt against a Hamas political leader in Jordan. The Israeli government had hoped that Yatom's resignation would restore some of Mossad's lost luster.

At a news conference in Bern, Federal Prosecutor Carla del Ponte said five Israeli agents were detained as they tried to plant the bugs a week ago outside Bern. All but one were released and are believed to have left the country.

The espionage effort was aimed at foreigners living in Switzerland, del Pont said, without elaborating.

In Jerusalem on Thursday, Israeli Prime Minister Benjamin Netanyahu confirmed that an Israeli citizen had been arrested in Switzerland but declined to comment further.

The affair is likely to bring new ammunition to critics of Netanyahu, whose slim majority in the Parliament is already threatened by fundamental disagreements over the peace process, religion and other issues.

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The alleged bugging attempt took place the night of Feb. 19, according to a statement from Del Ponte's office. While two accomplices kept watch, three men broke into the basement of a building near the capital, the statement said.

Residents alerted Bern state police about the break-in. Officers detained the five, releasing four of them after routine checks.

Investigations so far "have revealed that the five persons are of Israeli origin, and that they were mixed up in an operation of the Israeli secret service Mossad involving telephone bugging," the statement said.

Police scientists in Zurich are examining the confiscated bugging equipment used in the operation.

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