JERUSALEM, Feb 17 (Reuters) - The quiet assassination of a Hamas commander gets unexpectedly messy. Exposed and forced to atone before furious allies, Israeli Prime Minister Benjamin Netanyahu orders the spymaster responsible to fall on his sword.

That was in 1997, when the Mossad director resigned after his men botched the poisoning of Khaled Meshaal in Jordan. Now premier a second time, Netanyahu faces a similar crisis over the the death of another Hamas figure, Mahmoud al-Mabhouh, in Dubai. Israel's official silence on the Jan. 20 killing has been outpaced, in the popular imagination, by UAE police footage of the suspected assassins and revelations some of them had copied the European passports of actual immigrants to the Jewish state.

The idea that the Mossad, having long cultivated a reputation for lethally outwitting Israel's foes abroad, this time tripped up by underestimating Arab counter-espionage capabilities prompted commentators to demand a public reckoning.

Special scrutiny was devoted to Mossad director Meir Dagan, an ex-general now in his eighth year of service and praised by Israeli leaders for spearheading a shadow war against Hamas, Lebanese Hezbollah guerrillas, and Iran's nuclear programme. Amir Oren of the liberal Haaretz daily went as far as to call for Dagan to be fired, describing him as belligerent, heavy-handed and predicting a flap with Britain, Ireland, France and Germany -- the countries whose passports were forged.

Even if whoever carried out the assassination does reach some kind of arrangement with the infuriated Western nations, it still has an obligation to its own citizens, Oren wrote.

Several of the foreign-born Israelis who said their identities had been stolen for the Mabhouh assassination voiced fear they could now by vulnerable to prosecution for murder.

However, one Israeli intelligence source told Reuters that Dagan was in a stronger position than his ill-fated predecessor 13 years ago.

His record against Iran has won him great credit and, in the absence of the smoking gun that the captive Israeli agents in Jordan were, to act against the Mossad chief would look like an Israeli admission, the source said.

Israeli Foreign Minister Avigdor Lieberman did not deny Mossad involvement in Mabhouh's death but tried to deflect attention, implying in a radio interview that some other intelligence service or another country may have had a role.

Israel's allies recognize that our security activity is conducted according to very clear, cautious and responsible rules of the game, Lieberman asserted.

UNNATURAL CAUSES

Other pundits disagreed about the diplomatic price that could be exacted from Israel, which is already fending off foreign criticism of the hundreds of Palestinian civilian deaths during its offensive in the Hamas-ruled Gaza Strip last year.

But there was little arguing the fact that Hamas had turned the tables on Mabhouh's assassins by insisting UAE police launch a murder investigation after they initially ruled that his death, in a Dubai hotel room, had been of natural causes.

What began as a heart attack turned out to be an assassination, which led to a probe, which turned into the current passport affair, wrote Yoav Limor in Israel Hayom, a pro-government newspaper.

It is doubtful whether this is the end of the affair.

Israelis generally rally around Mossad's two-fisted image -- honed back in the 1970s, when the agency hunted down and killed Palestinians blamed for a deadly raid on Israel's Olympic delegation at the Munich Games.

But the Mabhouh hit underscored the difficulties spies must contend with in the digital era, with ubiquitous high-resolution CCTV coverage and easily accessed passport databases.

What happens in the modern world, the cameras everywhere -- it changes things not just for those whose trade is terror but also those trying to fight terror, former Mossad officer Ram Igra told Israel's Army Radio.

Mabhouh had masterminded the abduction and killing of two Israeli troops in 1989 and, more recently, the smuggling of Iranian-funded arms to Gaza. The attempted discretion of his killing indicated his assassins were not on a vendetta but, rather, aimed to quietly eliminate what they saw as a threat.

Yet the possibility that Mossad had so quickly come undone led Yossi Melman, author of two books on the intelligence agency, to suggest such assassinations would not be repeated.

Melman said a wider question would be also raised: Does Israel's assassinations policy pay off?

The 1997 attempted assassination in Amman, by two Mossad officers posing as Canadian tourists, unwittingly boosted Meshaal's status in Hamas. Netanyahu was also forced to free the Islamist faction's jailed spiritual leader, Ahmed Yassin.

(Editing by Michael Roddy)