The Moscow News reports that the spy-for-a-spy cold war game is heating up, which of course is not surprising, though it is totally disgusting from the point of view of Russian hopes for a better life.

Moscow has continuously denied four Israeli nationals convicted in Russia permission to serve their prison terms at home, unless Israel extradites Jewish Russian-born entrepreneur Leonid Nevzlin, once the second-in-command of Yukos and business partner of the jailed Russian tycoon Mikhail Khodorkovsky, leading Israeli newspaper Yedioth Ahronoth wrote Tuesday in a report headlined “Putin’s Israeli Hostages”.

According to the paper, four Israeli jewelers and diamond dealers convicted of illicit diamond smuggling in Russia are currently held in a Moscow prison. The authors of the story insist that the four men are effectively held hostage as Russia, seeking extradition of Leonid Nevzlin, refuses to allow them to serve their terms at home, in violation of diplomatic accords signed by the two countries.

The wrongdoings attributed to the Israeli nationals were decriminalized after the four were convicted. In talks with Israeli officials and families of the convicts the Russian officials reportedly hinted at the possibility of “the exchange”.

Moscow and Tel-Aviv signed the extradition agreement two years ago. Russia has already used it once when Israel extradited a Russian-Israeli suspect on condition that if convicted he would serve his prison term in Israel. Russia honored its commitments under the treaty.

But ever since the Israeli jewelers were found guilty in Moscow two years ago numerous requests made by Israel to let them return home have been flatly rejected by Russia. Even personal requests made by top Israeli ministers were ignored, Yedioth Ahronoth reported.

One of the convicts has recently wrote a letter to his relatives where he claimed that in October 2005 he and his inmates were visited in their cell by an unidentified man who informed them that their task was to bring Nevzlin back to Russia and assured them that if they agreed to help Russian law enforcers they would be discharged from prison; if not they would have to serve their entire terms in Russia.

The NEWSru Israel website asked Leonid Nevzlin who currently lives in Israel to comment on Yedioth Ahronoth’s report. “I have heard that those convicts were warned that if Israel refused to extradite Nevzlin they could abandon hope for early release or transfer to an Israeli prison. I also know that my extradition has many times been discussed at meetings between top Israeli and Russian foreign ministry officials but those conversations were never officially recorded,” the entrepreneur said.

Nevzlin also pointed out to an inaccuracy in Yedioth Ahronoth’s report. “In truth, there is no permanent extradition pact between Russia and Israel saying that criminals shall serve their sentences at home. Such an accord was achieved once, on the Zhuravlyov case (Multiple murder suspect Andrei Zhuravlyov, aka Terrazini, was extradited to Russia in 2002, after the court said he had obtained Israeli citizenship unlawfully). As to the jewelers’ case a separate agreement was drawn up,” Nevzlin said.

Nevzlin said he had no reason to doubt the facts unearthed by Yedioth Ahronoth. “I view [Russia’s actions] as a hostage-taking in spite of the fact that those people had been arrested before I moved to Israel. In fact, what we deal with here is blackmail where innocent Israeli are being used as bargaining chips,” Nevzlin said.