The Lavon Affair is a spy story in Israel's early years that left a nasty mark on the young state, with reverberations for the following 20 years.
The Lavon Affair refers to a failed Israeli covert operation, code named 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" with the aim of creating a climate of sufficient violence and instability to induce the British government to retain its occupying troops in Egypt's Suez Canal zone. The operation caused no casualties, except for operative Philip Natanson, when a bomb he was taking to place in a movie theater ignited prematurely in his pocket; for two members of the cell who committed suicide after being captured; and for two operatives who were tried, convicted and executed by Egypt.
The operation ultimately became known as the Lavon Affair after the Israeli defense minister Pinhas Lavon was forced to resign as a consequence of the incident. Before Lavon's resignation, the incident had been euphemistically referred to in Israel as the "Unfortunate Affair" or "The Bad Business" (Hebrew: העסק הביש, HaEsek HaBish). After Israel publicly denied any involvement in the incident for 51 years, the surviving agents were officially honored in 2005 by being awarded certificates of appreciation by Israeli President Moshe Katzav.