JERUSALEM -- Newspaper tycoon Robert Maxwell's mysterious death raised new questions Wednesday about his ties to the Israeli intelligence agency, Mossad, and the viability of his extensive holdings in several Israeli companies.

Maxwell's investment in the Israeli economy -- bucking the Arab blacklist by doing business in the Jewish state -- was particularly appreciated by the government and made his death especially shocking to politicians who had come to know him on his frequent trips to Jerusalem.


Besides owning a majority share in Israel's second biggest newspaper, Ma'ariv, Maxwell invested heavily in Israeli publishing, pharmaceutical and computer firms.

Plans were also being made for Maxwell's burial in Jerusalem, according to his oft-stated wishes.

'I knew him, especially in recent times as someone who took great interest in the Israeli economy, as someone who invested money in Israeli industries and as someone who offered to put at the disposal of the state of Israel his many connections in the international arena,' Prime Minister Yitzhak Shamir said in a statement.

'He was an enthusiastic friend of Israel.'

But exactly how close Maxwell's ties to Israel extended has been the subj ct of much,speculation since the publication of Seymour Hersh's book, 'The Samson Option,' which charged that the publisher was closely connected to the Mossad.

Maxwell bitterly denied the accusation and sued Hersh and his publisher, Faber and Faber, for libel.

Censorship regulations make it difficult for Israeli newspapers to write about the Mossad, and the major dailies simply noted Hersh's charges in their accounts of Maxwell's death.

Hersh told British television Tuesday night that he had more information on Maxwell, which he would soon disclose. He gave no details.

Maxwell died Tuesday in the eastern Atlantic Ocean after going overboard from his yacht in the Canary Islands.

Maxwell's intense interest in Israeli politics and business came only recently. Born in 1923, the son of Orthodox Jews who were killed in Nazi concentration camps, Maxwell kept a distance from the organized Jewish community until the mid-1980s.

Since then, he had bought a 75 percent share in Ma'ariv, become close with Israeli leaders, particularly in the ruling Likud Party, and helped facilitate the immigration of Jews from the Soviet Union. Last spring, Maxwell launched a weekly newspaper for Soviet immigrants, Vremya, and said he eventually hoped to make it a daily. Along with Ma'ariv, Maxwell ran the Keter publishing house.

Maxwell also owned a 16 percent share in the Teva pharmaceutical firm and a 30 percent stake in Scitex, a computer-imaging equipmnent firm. Last July he sold his shares in Scitex for $234 million, about six times what he paid for them in 1989.

On his frequent trips to Israel, Maxwell often spoke of his desire to be buried in Jerusalem. Israeli Army radio reported his family was making plans Wednesday for a funeral as soon as his body is released by Spanish authorities and can be flown to Israel.