UPDATE 2-Israel eyes spyware export curbs; Macron, Merkel troubled by abuse reports
* Media expose alleges global abuses of Pegasus software
* Israeli maker NSO says improper use invites cut-offs (Adds Merkel, Israeli liberal party meeting defense minister)
JERUSALEM, July 22 (Reuters) - An Israeli parliamentary panel may seek changes to defense export policy over reports that software sold by Israel's NSO Group was used to spy on journalists, officials and rights activists in several countries, a senior lawmaker said on Thursday.
Among suspected targets of NSO's Pegasus software is French President Emmanuel Macron, who convened his cabinet on Thursday over calls for investigations. Amid mounting EU concern, German Chancellor Angela Merkel told reporters in Berlin that spyware should be denied countries where there is no judicial oversight.
"We certainly have to look anew at this whole subject of licenses granted by DECA," Ram Ben-Barak, head of the Knesset Foreign Affairs and Defence Committee, told Israel's Army Radio, referring to the government-run Defence Export Controls Agency.
Israel has appointed an inter-ministerial team to assess reports based on an investigation by 17 media organizations that said Pegasus had been used in attempted or successful hacks of smartphones using malware that enables the extraction of messages, records calls and secretly activates microphones.
NSO has rejected the reporting by the media partners as "full of wrong assumptions and uncorroborated theories." Reuters has not independently verified the reporting.
NSO says it does not know the specific identities of people against whom clients use Pegasus. If it receives a complaint of Pegasus having been misused by a client, NSO can retroactively acquire the target lists and, should the complaint prove true, unilaterally shut down that client's software, the company says.
Other world leaders among those whose phone numbers the news organizations said were on a list of possible targets include Pakistani Prime Minister Imram Khan and Morocco's King Mohammed VI.
The Israeli government team "will conduct its checks, and we will be sure to look into the findings and see if we need to fix things here," said Ben-Barak. A former deputy chief of Mossad, he said proper use of Pegasus had "helped a great many people."
TARGETING TERRORISTS, CRIMINALS
DECA is within Israel's Defence Ministry and oversees NSO exports. Both the ministry and the firm have said that Pegasus is meant to be used to track terrorists or criminals only, and that all foreign clients are vetted governments.
But the alleged misuse has stirred questions within Prime Minister Naftali Bennett's cross-partisan coalition, one of whose members, the liberal party Meretz, queried Defence Minister Benny Gantz about NSO exports in a meeting on Thursday.
Gantz "emphasized the importance of upholding human rights within the framework of weapons sales," a joint statement said.
After Army Radio also aired an interview on Thursday with Szabolcs Panyi, a Hungarian journalist who said Pegasus had been found on his cellphone, NSO chief Shalev Hulio vowed to investigate.
"If he was indeed a target, I can assure you already that we will cut off the systems of whoever took action against him, because it's intolerable for someone to do something like this," Hulio told the station.
In keeping with NSO and Defence Ministry refusal to identify client countries, Hulio stopped short of confirming that Hungary had Pegasus. Budapest has not commented on the matter other than to say Hungary's intelligence-gathering is conducted lawfully.
He said NSO has worked with 45 countries and rejected around 90 others as potential clients. The company has shut down five Pegasus systems for abuse, Hulio said, adding that the software cannot be used against Israeli or U.S. mobile phones. (Additional reporting by Gergely Szakacs in Budapest Writing by Dan Williams Editing by Gareth Jones)
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