ORDER FROM PERES

The United States rejected Kimche's overture. But the idea was revived in early 1985, when, according to a published report in Israel that is viewed as the official Israeli version, Washington requested Israeli help to win the release of William Buckley, the CIA's chief in Beirut, who had been kidnapped in March, 1984 by pro-Iranian gunmen. Israel was to weave the contacts between the Reagan administration and Tehran.

That March, Shimon Peres, who was then prime minister, ordered Kimche to serve as one end of the U.S.-Iran bridge, finding out what the Americans were willing to do and passing on Iranian demands. Peres handed the Iranian side of the deal to two close friends in the arms trade: Adolph "Al" Schwimmer and Yaacov Nimrodi.

Schwimmer, 69, an engineer born in Bridgeport, Conn., moved to Israel in the late 1940s and founded the government-owned Israeli Aircraft Industries (IAI) in 1953. He had become fast friends with Peres, who was then a young deputy defense minister desperately trying to build an Israeli military industry for the country's defense against its Arab neighbors.

Schwimmer retired in the mid-1970s to go into private arms- dealing, especially of IAI products. Peres picked him for the Iranian assignment apparently because of his knowledge of U.S. aircraft parts. Tehran's squadrons of U.S. fighters and bombers had languished on the ground since a 1979 U.S. arms embargo and jet spare parts were most likely to be Tehran's demand in return for its "friendship."

Nimrodi, a balding, rotund Israeli in his early 60s who lives in London, was picked for his connections: Iranian-born and fluent in Persian, he was a military attache in Tehran in the 1960s and later went into private business, selling the shah billions worth of weapons in the 1970s.

There are reports that Nimrodi is a former Mossad agent and allegations -- he denies them -- that he had sold Israeli weapons to Khomeini and U.S.-backed Nicaraguan contra rebels. He and Schwimmer had been partners in a number of international arms deals.

ANTI-TANK MISSILES

Within days of receiving the Peres assignment, Nimrodi reportedly contacted an old friend, Saudi Arabian arms dealer Adnan Khashoggi. A week later, Khashoggi took him to a posh Geneva hotel to meet with Manucher Ghorbanifar, once an officer in the shah's SAVAK secret police and then a London-based assistant to Iranian Prime Minister Hussein Mussavi.

Nimrodi and Schwimmer worked for months mediating the negotiations between the Iranians and the American envoys -- National Security Council Director Robert McFarlane, his deputy, Marine Lt. Col. Oliver North, and McFarlane's successor, Adm. John Poindexter -- and arranging the shipment of U.S.-made weapons from Israel to Tehran.

The first agreement was concluded in September, 1985. Israel sent Iran 500 U.S.-made TOW anti-tank missiles. Iran paid Nimrodi $5 million. Nimrodi gave the Israeli government $3.5 million, kept the rest as payment for expenses for that and a previous shipment that had been arranged but never carried out. It is still not clear whether the United States replenished Israel's TOW supplies.

That same month, hostage Benjamin Weir was released by his Lebanese captors.

In the next three months, the Iranians requested 80 batteries of U.S.-made Improved Hawk anti-aircraft missiles. Instead, the Israelis sent 18 batteries of older Hawks.