TEL-AVIV 4 Jan (IPS, with report from Ha'aretz) Israel said Friday that it had intercepted and captured Thursday a ship in the Red Sea, carrying 50 tons of Iran-supplied weaponry, including long-range Katyusha rockets, intended for the Palestinian Authority.

The capture of the ship, "Karine A", a joint operation carried out by Israel's Navy and Air Force,

was announced in a press conference by General Shaul Mofaz, Chief of Staff of the Israeli Army, who said the weapons cache aboard the vessel included Katyusha rockets with a 20-kilometer range, "Strella" anti-aircraft missiles, snipers rifles, mortar launchers and shells, mines and a variety of anti-tank missiles, such as the Sager and Lao.

The ship was escorted by Israeli forces to Eilat where it docked Friday evening. Only a small portion of its cargo has been checked.

Senior officials said this was to date the most extensive attempt to smuggle weapons into the Palestinian Authority to be foiled by Israel.

Navy Admiral Yedidya Ya’ari told the press that the weapons were packed in special floating waterproof containers designed to be dropped into the sea and picked up by smaller craft.

"If (the cargo) had reached terrorists acting against us, it could have dramatically raised the threat faced by Israeli civilians and soldiers, and significantly widened the scale of terrorist attacks", said Mofaz, who is of Iranian origin.

Mofaz said the operation, in which naval commandos sezied the "Karine-A," was carried out overnight some 500 kilometers from the Israeli coast "in complete surprise and with no casualties".

He described the operation as "complicated and daring" and that the ship's 13-member crew had also been captured.

Ya'ari said the distant operation in international Red Sea waters, which included both navy vessels and air force helicopters, "stretched the envelope of Israel’s deterrent capability a few inches more."

"The connection between the Palestinian Authority and the smuggling operation is unequivocal, clear and undeniable" Mofaz pointed out.

For its part, the Israeli Foreign Ministry said it would ask the world to declare Iran a "terror-supporting state". "Israeli Foreign Minister Shimon Peres would make the call "next week", an Israeli statement said Friday.

"Since the ship was carrying Iranian weapons, Peres will next week call upon the leaders of the international community to declare Iran a terror-supporting state", the statement by the ministry said.

Iran immediately denounced as "baseless accusations" the "military cooperation with the Palestinian Authority".

Iranian Foreign Ministry Spokesman Hamid-Reza Asefi attributed the recent Israeli accusations against Iran to "Israel's new effort to mislead the world public opinion from paying proper attention to the Zionists' ruthless massacre of the innocent Palestinian nation", the official news agency IRNA said.

"The ever increasing level of that regime's inhumane crimes need to be concealed by coining such baseless accusations" IRNA quoted the Iraqi-born Asefi, who also criticised the international communities for remaining silent towards the inhumane suppression of the Palestinian nation.

Two Weeks ago, one of Iran’s most senior leaders had called for the destruction of Israel with nuclear bomb, saying that while one atomic bomb would destroy Israel completely, it would cause only minor damages against Muslims.

But considering the fact that the cargo was coming from the Persian Gulf, some Israeli sources said Iraq could as well be behind the weapons smuggling attempt.

The Israeli Foreign Ministry quoted Peres as saying that "the seizing of this ship is an important turning point for the Palestinian Authority."

"The Palestinian Authority faces a choice. They cannot continue this double game. An unequivocal declaration is required - whether they are for or against terror", Peres said.

Mofaz said senior officials in the Palestinian naval police were involved in the smuggling operation, adding that the ship's captain was an officer in the Palestinian naval police.

"We are witnessing a double game played by the PA leadership", Mofaz told reporters in Tel Aviv. He called the PA "a terrorist network, infected from head to toe by terror, that doesn't understand that it cannot make gains using terror, especially after the events of September 11."

"This smuggling attempt indicates the PA's intentions to continue violence and carry out deadly attacks deep inside Israel", he added.

Defense Minister Benjamin Ben-Eliezer said that the weapons-smuggling attempt showed that the PA was turning towards war, Israel Radio reported. He also said that the capture of the vessel points to the cynicism in the PA's priorities, as it invests money to obtain weapons instead of helping the Palestinian people.

But the Palestinian Authority denied any connection to the captured vessel and its arms shipment.

"We know nothing about this and we are going to investigate it," said Nabil Abu Rdainah, adviser to Palestinian Authority Chairman Yasser Arafat, calling the vessel's capture "Israeli propaganda" intended to torpedo the mission of U.S. envoy Anthony Zinni to bring about a cease-fire between the two sides.

U.S. Envoy for the Middle East, Anthony Zinni, who met Prime Minister Ariel Sharon and PA Chairman Yasser Arafat on Friday as part of his latest mission to broker a cease-fire, was informed of the boat's capture on Thursday.

Zinni, who cut short his first visit last month after a wave of Palestinian suicide attacks, said afterwards that U.S.-brokered Israeli-Palestinian security meetings would resume. He did not give a timetable.

"I am optimistic, hopeful and feel that we have the conditions that are right to make progress this time. And I am looking to return often and very shortly after this mission to keep the process moving," Zinni said.

In Washington, the official spokesman Richard Boucher said Zinni had demanded "explanations" from the PA Chairman Arafat when he met him.

"Zinni expressed firm condemnation of any attempt, by any group, to increase tension", Boucher said, adding that he had "nothing to say for the moment" concerning the alledged Iranian involvement in the affair.

Security sources said that the size and scope of the cargo captured on the Karine-A was far more troubling than the weapons found on board the "Santorini," a ship the navy intercepted off the coast in May last year.

The Santorini was laden with large quantities of weapons en route from Lebanon to the Palestinian Authority. ENDS ISRAEL PA CARGO 4102