The 'indecent exposure' soldier has been demoted, but remains a guard at the camp. Others appearing in photos taken at the party have been reprimanded.

Here's the detail story:

In front of a cheering male audience, two young women wearing only bras and panties throw themselves into a mud-filled plastic kiddie pool and roll around in a wild wrestling match.

At one point a man in the audience raises a water bottle and douses the entwined pair.

At another, a "referee" moves in to break up the scantily clad grapplers.

A young blond lifts her T-shirt to expose her breasts. A brunette turns her back to the camera and exposes her thong undies.

These scenes, taken from 30 photos leaked to the Daily News, could have been snapped at an out-of-control frat party.

But this happened a world away from any American college.

The photos were taken in Camp Bucca, the military prison at Umm Qasr in the hot sands of southern Iraq near the Kuwaiti border.

The women are not coeds but military policewomen who had left their uniforms in a pile not far off.

The men are soldiers, too. Most of them wore T-shirts emblazoned with Army logos, but at least one was still wearing his uniform.

Some were sergeants, including the referee, and some allegedly were drunk.

The photos were taken last Oct. 30, in the same period when enemy detainees were being transferred to Camp Bucca from Abu Ghraib, the prison made notorious by photos of Americans torturing naked Iraqis.

The Camp Bucca pictures document no such abuses.

But they do show what experts called a disconcerting lapse in discipline at a time when Army brass was touting the camp as a model of reform.

"It was basically a goodbye party for those of us who were leaving and a welcome party for those coming in," the alleged referee, Sgt. Emil Ganim of the 160th Military Police Battalion, told The News. "It was a chance for people to blow off some steam before coming home after spending a year in a combat zone."

But one participant described less-benign behavior.

Two sergeants, she said, told her "they had been lending out their room for soldiers to have sex" - a serious infraction of military regulations.

One female soldier, a prison guard with the 160th Military Police Battalion, was photographed baring her breast and showing off her thong panties.

The picture apparently was taken in the room of one of those sergeants, an investigator reported.

The witness told investigators that two high-ranking noncommissioned officers, a first sergeant and a master sergeant, were present. She "noted that these NCOs had been drinking and were noticeably drunk," the report said.

Ganim said American civilians at the camp also participated in the party, and "if anybody had liquor, it was them."

Ganim has since returned to his civilian job as a deputy sheriff in Leon County, Fla.

"It appears that this event was allegedly coordinated by NCOs [sergeants] of the 160th," according to the initial investigation.

One of the soldiers told investigators the mud-wrestling match was underway when she arrived.

"She took off her uniform and joined the other female soldiers that were wrestling," the report says. But "once soldiers started asking for the females to expose themselves [she and two of the other wrestlers] put their uniforms back on and left the area."

But at least one woman was not deterred.

Deanna Allen, a 19-year-old prison guard with the 105th MP Battalion, smiled and lifted her T-shirt. Photos show a man standing close to her and leering at her breasts while another G.I. snaps pictures.

"From what I understand they dared her to do it," said Allen's grandmother, Luci Tomlin, in Black Mountain, N.C. "It was a loose moment. She is a strong-headed young lady. Sometimes she can be a little irrational."

Allen, who is still stationed in Iraq, did not respond to E-mailed questions from The News. She was demoted in rank to private first class.

"A sex party with alcohol that is prohibited would suggest a serious breakdown of military discipline," said Washington-based lawyer Eugene Fidell, a military-justice expert. "Just how it would be handled would be determined by the commander, who has very broad discretion in situations like this.

Fidell said punishments could range from "a good chewing out to loss of rank" for enlisted personnel and "a letter or career-killing transfer" for officers who allowed it to happen. (NY Daily News)

FEB 7: Two suspected Israeli spies found guilty of passport fraud in New Zealand are dropping their appeal against the convictions, raising Government hopes it may yet receive the apology it has sought from Israel.

Prime Minister Helen Clark said yesterday that Israel had maintained it would not be addressing the matter until the court process was complete.

The dropping of the appeal has raised the question of whether an apology is looming for what Helen Clark has called an "utterly unacceptable breach" of international law and New Zealand sovereignty.

The case took a new turn at the weekend when it was revealed Australia has quietly expelled an Israeli diplomat who visited the suspected agents in Mt Eden Prison last year.

The deputy chief of mission at the Israeli Embassy in Canberra, Orna Sagiv, declined yesterday to comment on the expulsion or the dropping of the court appeal.

New Zealand imposed diplomatic sanctions on Israel when Eli Cara and Uriel Zoshe Kelman were jailed for six months for stealing the identity of a tetraplegic man to obtain a false New Zealand passport.

Kelman's lawyer, Grant Illingworth, QC, said yesterday that he was filing a notice in the Court of Appeal dropping the challenge to the convictions, but refused to say why.

A spokesman for Helen Clark said the notice had not yet been filed so she had no comment.

She was reluctant to be drawn into the latest development - the news that Australia had ordered out Canberra-based Israeli diplomat Amir Lati, who visited Cara and Kelman in Mt Eden.

Israeli paper Ma'ariv reported at the weekend that Australia's Department of Foreign Affairs and Trade summoned a senior embassy official - named by an Australian newspaper as Mr Lati - and requested his immediate recall or steps would be taken to deport him.

Israel instructed Mr Lati to return home immediately.

A spokesman for Foreign Minister Phil Goff said he was unaware of any contact between New Zealand and Australia over the issue.

Helen Clark said the issues around the diplomat were something for the Australians to deal with, adding it was normal practice for diplomats to visit prisoners overseas.

"Our diplomats regularly do visit New Zealanders who are in trouble and end up in another country's prison, so I wouldn't have seen anything extraordinary about an Israeli official coming from Canberra."

In response to the passport incident, New Zealand delayed approval for the appointment of a new Israeli ambassador and required all Israelis coming to New Zealand on Government business to get visas.

The Government has also said it would decline any approach by Israeli President Mosche Katsav to visit New Zealand in association with a proposed trip to Australia, which is due next month.

Helen Clark yesterday reaffirmed he would not get an invitation.

"We never expected this sort of action from a Government with which we had friendly relations."

Green MP Keith Locke said the Government should investigate whether the Israeli attempt to obtain a passport was run out of the Canberra embassy.

He said dropping the appeal indicated the Israelis did not want the spotlight turned on the affair again.

ALLEGED SPIES

Eli Cara and Uriel Zoshe Kelman were jailed for six months last July for stealing the identity of a tetraplegic man to obtain a false New Zealand passport.

The NZ Govt believes the men were Israeli intelligence operatives and imposed diplomatic sanctions until the Israeli Government apologises.

The pair left NZ in September after serving half their sentences. Appeals against the convictions are now being withdrawn but Israel's embassy in Canberra refuses to comment.

(The New Zealand Herald)