New Zealand arrested the two men, Uri Kelman and Eli Cara, in March 2004 and alleged they were working on behalf of an Israeli intelligence
"The Israeli letter of apology, signed by Foreign Minister Silvan Shalom, states that Israel apologizes for the involvement of its two citizens in the activities which led to their arrest and convictions in New Zealand," Clark said in a statement.
"It further states that Israel regrets these activities and commits itself to taking steps to prevent a recurrence of similar incidents in future."
As a result, New Zealand has lifted diplomatic restrictions, restoring visits and other diplomatic activities.
"The conclusion of this exchange of letters today means that the matter at issue is now behind us and we can move forward to resume friendly diplomatic relations with Israel," she said.
The two men pleaded guilty in July to trying to obtain a New Zealand passport using the identity of a wheelchair-bound cerebral palsy victim.
Kelman and Cara were released and deported in late September, having served less than half of their six-month sentence. They escaped a more severe sentence by each donating about USD 35,000 to a local charity. They faced a maximum penalty of five years in jail and have appealed their convictions.
A third Israeli man, Zev William Barkan, whom defense lawyers pinpointed as the mastermind behind the passport operation, left New Zealand before he could be arrested.
Despite denials by the two men and the Israeli government, many in New Zealand are convinced the Israelis were Mossad agents. Prime Minister Clark herself issued press statements on the matter on several occasions and referred to the two as “Israel’s intelligence agents.”
At one time, Clark has also rejected the possibility that President Moshe Katsav would be visiting New Zealand, saying the fraud scandal made such visit impossible under the circumstances.