DATE=11/8/98 TYPE=CORRESPONDENT REPORT NUMBER=2-241364 TITLE=ISRAEL / CYPRUS SPIES (L) BYLINE=AL PESSIN DATELINE=JERUSALEM CONTENT= VOICED AT: INTRO: TWO ISRAELI MEN HAVE BEEN ARRESTED IN CYPRUS ON CHARGES OF SPYING. V-O-A'S AL PESSIN REPORTS FROM JERUSALEM. TEXT: THE ISRAELIS WERE ARRESTED SATURDAY IN AN APARTMENT NEAR A CYPRIOT MILITARY BASE ON THE ISLAND'S SOUTHERN SHORE. POLICE SAY THE MEN HAD BEEN ACTING SUSPICIOUSLY AND THAT A CHARGE OF SPYING IS SUPPORTED BY EVIDENCE FOUND IN THE APARTMENT. THE EVIDENCE INCLUDES DOCUMENTS, COMPUTERS, TAPE RECORDERS AND A RADIO THAT SCANS POLICE FREQUENCIES. A COURT ORDERED THE MEN HELD FOR EIGHT DAYS. THE CYPRUS POLICE SAY THE MEN ALSO VISITED THE SAME AREA IN OCTOBER, DURING A LARGE CYPRIOT MILITARY EXERCISE. ISRAELI OFFICIALS SAY THEY ARE LOOKING INTO THE MATTER AND THE CYPRIOT AMBASSADOR TO ISRAEL SAID HE HOPES THE ISSUE CAN BE RESOLVED QUICKLY. AT THE SAME TIME, THE AMBASSADOR AND OTHERS FAMILIAR WITH THE CASE SUGGEST THE ISRAELIS MAY HAVE BEEN SPYING FOR TURKEY -- EITHER AS INDEPENDENT CONTRACTORS OR UNDER ORDERS FROM ISRAEL'S INTELLIGENCE AGENCY, THE MOSSAD. CYPRUS HAS FREQUENTLY EXPRESSED CONCERN ABOUT ISRAEL'S CLOSE DEFENSE RELATIONSHIP WITH TURKEY. CYPRIOT PRESIDENT GLAFKOS CLERIDES RAISED THE ISSUE WITH ISRAELI PRESIDENT EZER WEIZMAN LAST WEEK, WHEN MR. WEIZMAN MADE THE FIRST-EVER VISIT TO CYPRUS BY AN ISRAELI PRESIDENT. AT THE END OF THE VISIT, PRESIDENT WEIZMAN EXPRESSED REGRET HE HAD NOT SUCCEEDED IN CONVINCING THE CYPRIOTS ISRAEL'S RELATIONS WITH TURKEY TO NOT THREATEN ANY COUNTRY. PRESIDENT CLERIDES' ETHNIC-GREEK GOVERNMENT RULES MOST OF CYPRUS, BUT THE NORTHERN PART OF THE ISLAND IS OCCUPIED BY TURKEY AND CLAIMS TO BE A SEPARATE COUNTRY. CONCERN ABOUT THE ALLEGED ISRAELI SPIES WAS ALSO EXPRESSED IN GREECE. ONE NEWSPAPER WROTE THIS INCIDENT DEMONSTRATES FEARS ABOUT THE ISRAEL-TURKEY RELATIONSHIP AND ITS POTENTIAL IMPACT ON GREECE AND CYPRUS ARE JUSTIFIED. (SIGNED) NEB / AWP / DW / WD 08-Nov-98 7:41 AM EST (1241 UTC) NNNN Source: Voice of America .