Arms Merchant Says Private Dealers Sell Arms to Contras

TEL AVIV, Israel (AP) _ Private Israeli arms dealers have been supplying weapons to Nicaraguan rebels with CIA approval, a man identified as one of the dealers told Israel television Friday.

″They are asking for small arms and ammunition. They would like to have Israeli instructors in order to guide their units in the field,″ said the man, whose face was hidden from the camera.

During a recent visit to Nicaragua he met with CIA representatives, the man said, adding: ″I would describe them as supervisors. ... At a meeting we had there, those people actually limited the amount of supplies.″

The merchant said he negotiated arms supplies with the rebels, known as Contras, ″in a country neighboring Nicaragua.″ Most of the anti-Sandinista rebels are based in Honduras, but they also have offices in Costa Rica.

The weapons dealer said the negotiations lasted for several days ″in the house of a man ... who occupies a top position in the whole system.″ He did not identify the man.

Israel has denied any direct involvement with the Nicaraguan rebels fighting thte Sandinsta government.

U.S. Attorney General Edwin Meese III has said profits from shipments of U.S. arms Israel delivered to Iran were diverted to the Contras. Israel said Iran paid the money directly into a Swiss bank account and none of it passed through Israeli hands.

Adolfo Calero, a Contra leader, also denied that Israel assisted the rebels.

″We have not received any aid from Israel. But we would be grateful″ to do so, Calero said in a telephone interview from Miami with the state-ownd television.

Among Israeli weapons dealers involved in supplying the rebels were Pesach Ben-Or and Marcus Katz, Israel television said. It described them as former partners now in competition and said both use the service of former and reserve officers of the Israeli army.