Operation Susannah, which became the "Affair" or the "Lavon Affair," troubled the state for many years.
The Lavon affair refers to a failed Israeli covert operation, codenamed Operation Susannah, conducted in Egypt in the summer of 1954. As part of the false flag operation, a group of Egyptian Jews were recruited by Israeli military intelligence to plant bombs inside Egyptian, American, and British-owned civilian targets: cinemas, libraries and American educational centers. The bombs were timed to detonate several hours after closing time. The attacks were to be blamed on the Muslim Brotherhood, Egyptian Communists, "unspecified malcontents," or "local nationalists."
Following the failure of the operation, 11 Egyptian Jews were arrested and charged with acting on behalf of the Israeli security services, to sabotage the relations between Egypt and Western states at a time when Egypt was negotiating with Britain the latter evacuation of the Suez Canal Area.
The Egyptian trial began on 11 December and lasted until 27 January 1955; two of the accused, Moshe Marzouk and Shmuel Azar were condemned to execution by hanging, two were acquitted, and six other accused were sentenced to lengthy prison terms: Victor Levi, Philip Natanson, Robert Dasa, Marcel Ninio, Meir Meyuhas, and Meir Za'afran.
"Who gave the instruction" to a group of Egyptian Jews to plant bombs in Egypt?
It seemed that Prime Minister Moshe Sharet was kept out of the loop. Pinhas Lavon, Minister of Defense, denied any knowledge of the affair, but the head of the Intelligence Directorate, Colonel Benjamin Gibli, claimed to have received a verbal instruction from Lavon to carry out the operation. The Chief of Staff Moshe Dayan also put the blame on the Minister of Defense. A commission of inquiry of two, appointed by the Prime Minister, did not succeed in exposing the truth.
Following the failure, Colonel Benjamin Gibli and Major Motke Ben-Zur, commander of unit 131 were dismissed. The Lavon Affair, which undermined the foundations of Israel governance, brought about the resignation of Lavon on February 1955, and later the resignation of Prime Minister David Ben Gurion.