Just over 30 years ago, towards the end of 1957, information began to trickle into the headquarters of Israel's Mossad intelligence service about the whereabouts of Adolf Eichmann, the Third Reich bureaucrat who had overseen Hitler's efforts to implement his Final Solution - the elimination of the Jews.

Eichmann, it seemed, was living under a false name in a suburb of Buenos Aires, confident he had evaded the immediate post-war efforts to bring prominent Nazis to justice.

The state of Israel, born in the aftermath of the Nazi Holocaust, was less than a decade old - a nascent Jewish response to Hitler, defiant proof of his failure. Ideally, the young state would have wanted to put Hitler himself on trial in Jerusalem for his crimes against the Jewish people. Informed that the Mossad had traced Eichmann, Israel's political leaders decided he could serve as an appropriate substitute.

Intelligence-gathering continued for a further two years. A kidnapping plan was painstakingly researched. Blissfully unaware of what was about to befall him, Eichmann was monitored by a crack team of Mossad surveillance experts. And then, on May 11th, 1960, as he walked along Garibaldi Street near his Buenos Aires home, Eichmann was confronted and grabbed. For more than a week, he was held incommunicado at a Mossad safe house in the city.

Then he was smuggled back to Israel on the same El Al plane that had flown in an Israeli delegation to Argentina's 150th anniversary festivities. A year later, he was put on trial in Jerusalem. A year after that, he was hanged - the only person Israel's courts have ever put to death. For the Mossad, whose delicate operation - a hush-hush illegal kidnapping in the capital of a friendly country - had been completed with hardly a hitch, it was an episode to savour, an episode that helped establish its worldwide reputation as a formidable, perhaps unparalleled, intelligence agency.

That was then. Today the Mossad - the "Institute for Intelligence and Special Operations" - is in disarray. Its glorious history of daring success is being eclipsed by a series of humiliating failures. Its international counterparts are becoming wary of working with it. There is much bitterness within its ranks. Incredibly, for a secret service, its officials have taken to leaking details of its operations to the local media.

And perhaps most critically, the Israeli government, in ordering the Mossad into action, can no longer rely on it to carry out sensitive and dangerous operations with maximum efficiency and a minimum of fuss.

Some officials within the Mossad like to trace its decline to the appointment, less than two years ago, of Danny Yatom as the head of the service. A career soldier who had served as military attache to prime minister Yitzhak Rabin, Gen Yatom was an outsider, brought in because the government deemed none of the Mossad's most senior men and women qualified to take over from the departing chief, Shabtai Shavit.

It was under Gen Yatom that the plan was hatched last year to assassinate Khaled Mashaal, a hitherto unknown Amman-based political official of the Islamic fundamentalist movement Hamas.

The Israeli government, determined to strike back at the group whose suicide bombers, last summer, blew up Jerusalem's main vegetable market and its city-centre outdoor shopping arcade, approved the hit last September. Two Mossad men approached Mr Mashaal outside his Amman offices, and injected him with a lethal, slow-working, chemical agent. So far, so good.

Unexpectedly, however, the victim's bodyguard chased them as they tried to make their getaway, caught them, and managed to attract the attention of a Jordanian security patrol. The agents were captured, and all hell broke loose. Hamas threatened a new series of suicide attacks. King Hussein threatened to sever the peace treaty he'd signed with Israel less than three years earlier.

Helpless and humiliated, the Israeli government was forced by King Hussein to send over the antidote that saved the dying Mr Mashaal and, worse still, to release numerous Palestinian prisoners from its jails - including the charismatic Sheikh Ahmed Yassin, the wheelchair-bound founder of Hamas, who has since re-established his command of the movement, and is leading it to ever-greater popularity among Palestinians in Gaza and the West Bank.

The Mashaal episode prompted a chorus of international criticism of Israel - for sending assassins on to the streets of a friendly capital, armed with chemical weapons, to kill a man with no proven involvement in anti-Israeli violence. But inside Israel, and especially inside the Mossad, those considerations were not seriously addressed.

What was keenly felt was the embarrassment of amateurish failure, of the bungling of a relatively straightforward mission because of insufficient planning and practice. The appalling incompetence of the Mashaal fiasco was a world away from the smooth efficiency of the Eichmann kidnapping.

It was Gen Yatom's further misfortune to be serving as the Mossad chief at the time of a second, hugely damaging blow to the organisation's standing. Two months ago, a long overdue internal investigation finally confirmed that Yehudah Gil, a legendary field agent who also trained young recruits on the dark practices of deception, had been guilty of deceiving his own employers for years.

Rather than admitting that his key source, a one-time senior Syrian official, had dried up, Mr Gil had taken to making up his own intelligence reports - suggesting that Syria was preparing for war with Israel.

These manufactured assessments may have persuaded Mr Rabin in the early 1990s to disregard Syrian peace feelers. In 1996, Mr Gil's alarmist, baseless reports brought the two countries to the very brink of conflict on the Golan Heights.

Earlier this month, a government-appointed committee and a separate parliamentary inquiry pinned much of the blame for the Mashaal blunder on Gen Yatom, who was portrayed as a thick-headed, stolid figure, ill-suited to intelligence work, and inclined to try and shift blame to his inferiors. Pressure mounted for him to resign.

The Prime Minister, Mr Benjamin Netanyahu, failed to provide a strong, public vote of support. And so, last Tuesday, when Gen Yatom submitted a letter of resignation to Mr Netanyahu, it seemed that he was, properly if belatedly, acknowledging that he was the wrong man for the job.

Not so. Now, we know that Gen Yatom finally threw in the towel because of yet another operational fiasco - the discovery by Swiss police a week ago of a team of Mossad agents bugging the phones in the basement of a building on the outskirts of Berne, the reported home of an Islamic activist.

Remarkably, news of the arrest of the five agents (four were later released; one is set to stand trial in Switzerland), leaked from within the Mossad - presumably from officials bent on hastening Gen Yatom's departure. That points to tremendous tensions and resentments inside the organisation, and indicates that Gen Yatom's successor needs to carry out some urgent house-cleaning.

The successor will also have the task of rehabilitating the Mossad's standing with its international counterparts. What kind of intelligence agency would want to work closely with a Mossad that not only fouls up its missions, but talks about the failures afterwards?

But there is another factor, too, in the Mossad's decline: the sense that its operations are being directed at inappropriate targets, and that, as a consequence, it is enjoying less sympathy from friendly governments when things go awry.

It is possible that, had the Mossad men in Jordan been after someone with a proven role in orchestrating suicide bombings, rather than the unknown Mr Mashaal, King Hussein might not have reacted with such fury. Similarly, had the five agents in Berne been caught bugging a secret Iranian arms-buying headquarters rather than a nondescript residence in a sleepy suburb, the Swiss might have been less indignant. The Mossad, after all, messed up many times even during its glory years - killing an innocent Moroccan waiter in Norway in 1973 (he'd been mistaken him for a Palestinian gunman); getting agents caught in various embarrassing situations in Britain, Cyprus and, yes, even in Berne (in 1963, threatening the daughter of a German scientist it feared was developing missiles for Arab clients).

Those episodes were swiftly smoothed over by Israel's allies, because there was a fundamental understanding of the Mossad's goals. If that understanding now seems to be evaporating, then the blame lies less with the Mossad than with the current hardline Israeli government that directs it.