JERUSALEM - When the U.S. State Department yanked Martin S. Indyk's security clearance, it also sidelined a key player in the Arab-Israeli peace process, which is already perilously close to failure.
A trusted intermediary between President Clinton and Prime Minister Ehud Barak, Indyk, the U.S. ambassador to Israel, is steeped in knowledge of the broad sweep and minute details of the conflict and has a deep understanding of Israel's fractious internal politics.
The State Department suspended Indyk's security clearance Thursday amid investigations by the FBI and the department's security service into alleged mishandling of classified materials by the envoy.
The suspension came a day before Indyk was scheduled to return to Israel from the United States. He is now barred from handling classified material that would be generated in further peace negotiations.
A source in Washington familiar with the investigation said the FBI is focusing on the period since December. Indyk began his second tour as ambassador to Israel in January.
Israelis expressed sympathy for Indyk's plight in print, on the airwaves and in interviews yesterday, with some remarking that Washington's concern over the security of its classified materials appears to border on hysteria.
At issue are five instances in which Indyk might have violated regulations by using an unsecured laptop computer while traveling - within and outside Israel - to write memorandums based on meetings with foreign officials.
When he reached the Embassy or another government office, he would hand in the computer disk so the memo could be entered into the State Department's classified communication system and sent to senior officials in Washington.
Officials fear that if a government laptop were stolen, original documents could be retrieved using sophisticated software.
The FBI is also investigating cases in which junior officials traveling with Indyk carried classified briefing materials for his use and times when Indyk took documents home. The source said there has been no suggestion that any of the classified material fell out of Indyk's control. His house in Israel has a secure safe.
The State Department inquiry was interrupted when the FBI was called in but is expected to resume. The department's investigators reportedly want to probe Indyk's conduct over a longer period, perhaps since his first tour as ambassador from 1995 to 1997.
Since joining the Clinton administration, the Australian-reared Indyk has been an important player in U.S. efforts to broker peace between Israel and its neighbors. The subject has preoccupied him since long before he became a diplomat, when he worked for the pro-Israel lobby in Washington and then ran the Washington Institute for Near East Policy. An analyst by training, he is a voracious consumer of information.
Rarely has pressure on the U.S. peace team been more intense than since summer. Starting with the failed summit at Camp David, officials have been feverishly trying to nail down a final peace agreement between Israel and the Palestinians before Clinton's term ends in January.
In Israel, a closer deadline looms. Barak's governing coalition has collapsed, largely because of concessions he made to the Palestinians, and he might see his government fall in a vote of no confidence soon after parliament returns from its summer recess in late October.
Negotiating gaps have narrowed significantly, particularly over Jerusalem, with Israel prepared to relinquish total control over the Old City and its most sacred site to Muslims and Jews, Haram al Sharif or Temple Mount. Its latest suggestion is to place the mount under the United Nations. The Palestinians want full Muslim sovereignty.
But none of the crucial issues, including final borders and the fate of Palestinian refugees, has been solved.
By losing his security clearance, Indyk is barred from sensitive discussions, effectively removing him from the scene, and has been told to remain in the United States.
Indyk's punishment appears strange to officials in Israel, where access to secrets is based more on trust than on rules and intelligence is often deliberately leaked
"For us, it's real nonsense," said Eitan Haber, an Indyk friend and a top aide to the late Prime Minister Yitzhak Rabin, who signed the first groundbreaking agreement with Palestinian leader Yasser Arafat.
"You could put all Israeli ministers in jail" for Indyk's alleged offense, he said. "Moshe Dayan [the famed general and defense minister] left a top-secret paper on a table at a coffee shop. It was a headline for one day only."
Columnist Nahum Barnea, writing in the Hebrew-language Yedioth Ahronot, cracked, "In Israel, a senior security adviser could leave a briefcase full of secret documents in a Parisian whore's room - and emerge unscathed."
In this sharply divided country, supporters of the peace process place Indyk in the top tier of U.S. ambassadors, along with Samuel Lewis, Walworth Barbour and Thomas R. Pickering, They admire his candor and willingness to declare, as he did recently, that Jerusalem should be shared.
But Indyk is not universally admired. Members of the government of former Prime Minister Benjamin Netanyahu, with whom the Clinton administration was frequently at odds, suspect that Indyk deliberately leaked information designed to embarrass the government.