The Israeli government did not tamper with the Hezbollah devices that exploded, defense and intelligence officials say. It manufactured them as part of an elaborate ruse.

In Lebanon, as Israel picked off senior Hezbollah commandos with targeted assassinations, their leader came to a conclusion: If Israel was going high-tech, Hezbollah would go low. It was clear, a distressed Hezbollah chief, Hassan Nasrallah, said, that Israel was using cellphone networks to pinpoint the locations of his operatives.

. . .

Israeli intelligence officials saw an opportunity.

Even before Mr. Nasrallah decided to expand pager usage, Israel had put into motion a plan to establish a shell company that would pose as an international pager producer.

By all appearances, B.A.C. Consulting was a Hungary-based company that was under contract to produce the devices on behalf of a Taiwanese company, Gold Apollo. In fact, it was part of an Israeli front, according to three intelligence officers briefed on the operation. They said at least two other shell companies were created as well to mask the real identities of the people creating the pagers: Israeli intelligence officers.

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