Israel was taken by surprise by the Azerbaijan government's sudden decision to release two Lebanese Hizballah terrorists and an Iranian citizen serving prison sentences for plotting attacks in Feb. 2009 on the Israeli embassy in Baku and a key early warning radar station guarding against Iranian missile fire.
DEBKAfile's counter-terror sources report that Israel, which has extensive and strategically important ties with Azerbaijan has preferred to deal with this setback discreetly, although it could be as potentially damaging as the breach with Turkey - especially if Baku goes the way of Ankara and fosters closer relations with Tehran, its southeastern neighbor.
The two Hizballah operatives, Najm-Eddin Ali Hossein and Mohammad Karaki Ali, were sentenced to 15 years for plotting to blow up the Israeli embassy and the Daryal radar station, which is situated on the northeastern Azerbiajan mountaintop of Gabala for tracking missile and satellite activity inside Iran.
The attacks were scheduled for February 2009, on the anniversary of the death of the organization's commander in chief Imad Moughniyeh.
The Iranian convicted was identified only as "Fazli."
Fourteen year-sentences for complicity in the conspiracy were handed down to four Azeris, Javid Mohammof, Vidadi Rassulof, Moshfeq Amanof and Afghan Balashof.
Our sources in Baku report that Hossein and Ali may have only posed as Lebanese Hizballah members to hide their real identities; they are suspected of being Iraqi Shiite agents of the Iranian Revolutionary Guards with Iranian nationality.
On Monday and Tuesday, Aug. 8-9, Azerbaijan freed 12 Iranian citizens from its prisons (including one woman). They were flown straight out of the country by an Iranian special flight.

Their release was presented officially as a prisoner swap under the provisions of an accord the two countries signed in 1998 - although it would not have covered two Lebanese citizens. This "swap" was the cover for the handover to Iran of the convicted bombing plotters.
Tehran always disclaimed involvement in the bomb conspiracies against the Israeli embassy yet tried to force the Azerbaijan government to free the plotters without a trial. But Washington and Jerusalem insisted they be prosecuted and given the full penalty laid down by the law for their deeds.
Justice ministry sources in Baku confirmed to DEBKA informants that the two Lebanese had been accused in a trial which took place in October 2009 behind close doors of terrorism, aggravated espionage, illegal use of weapons and explosives, drug offences and entering the country on forged documents.
The Azeri authorities did what they could to avoid publicity.

Israel maintained they got off too lightly, but withheld protest.

From the prisoner swap with Iran, Baku obtained the release of an Azerbaijani engineer Rashid Aliev serving time in Iran as an accused spy and two diplomats charged with drug trafficking.
Under an arrangement with Baku University, Aliev was employed by Iran's Sanayeh Electronic Sazan industry from 2006 to 2008, when he suddenly left and went home. On Oct. 5, 2009, during a short visit to Tehran, he was arrested on the pretext of visa irregularities and subsequently charged with industrial espionage for Azerbaijan.

Tehran accused the engineer of gathering information on Iran's nuclear activity for the Israeli Mossad but had him sentenced in a closed-door trial to only three years jail indicating they did not believe their own charge. On Aug. 12, he was back home, a free man.
Tehran, which keeps a wary eye on Israeli activity in Azerbaijan, holds an exaggerated view of the security and trade relations between Jerusalem and Baku, although DEBKAfile's sources confirm there is cooperation in sensitive areas.
According to Iran, a sophisticated Israeli communications center in southern Azerbaijan eavesdrops on its neighbor's military signals, a charge on which neither Baku nor Jerusalem are willing to comment.
Iran further claims the rate of cancer in the populations on both sides of the Azerbaijan-Iran border is disproportionately high owing to Israeli electronic activity.

Then, on August 5, Tehran came up with a new charge: Israel was buying up large plots of farmland at top prices in the border region in order to contaminate Iranian farms on the other side and reach deeper into Iran with expanded listening facilities.
Most of all, the Iranians fear Baku will give the Israeli Air Force bases for striking their nuclear facilities from the north.