The Lavon Affair refers to the scandal over a failed Israeli covert operation in Egypt known as Operation Susannah, in which Israeli military intelligence planted bombs in Egyptian, American and British-owned targets in Egypt in the summer of 1954 in the hopes that "the Muslim Brotherhood, the Communists, 'unspecified malcontents' or 'local nationalists'" would be blamed. It became known as the Lavon Affair after the Israeli defense minister Pinhas Lavon, who was forced to resign because of the incident, or euphemistically as the Unfortunate Affair.
Israel admitted responsibility in 2005 when Israeli President Moshe Katzav honored the nine Egyptian Jewish agents who were involved.
http://en.wikipedia.org/wiki/Lavon_Affair