In 1954, Israeli agents working in Egypt planted bombs in several buildings, including a United States diplomatic facility, and left evidence behind implicating Arabs as the culprits. The ruse would have worked, had not one of the bombs detonated prematurely, allowing the Egyptians to capture and identify one of the bombers, which in turn led to the round up of an Israeli spy ring.
Some of the spies were from Israel, while others were recruited from the local Jewish population. Israel responded to the scandal with claims in the media that there was no spy ring, that it was all a hoax perpetrated by "anti-Semites".
Worth remembering as the events in Mumbai unfold.