JERUSALEM, Feb 18 (Dan Williams/Reuters) - Mossad chief Meir Dagan sees no reason to resign over a scandal-fraught assassination in Dubai, and Prime Minister Benjamin Netanyahu is unlikely to ask him to, a confidant of the Israeli spymaster said on Thursday.

While Israel has declined to comment on the Jan. 20 slaying of Hamas commander Mahmoud al-Mabhouh, the United Arab Emirates (UAE) named the suspected killers, including several who had copied the European passports of actual immigrants to Israel.

Discerning a Mossad modus operandi and predicting a stink over the trans-national identity thefts, some Israeli pundits suggested Dagan would be forced to step down -- like predecessor Danny Yatom in 1997 after a botched assassination in Jordan.

But the confidant, who asked not to be identified, told Reuters: Dagan has no intention of quitting before his tenure is completed.

Resignation would be tantamount to taking responsibility, the confidant said. The hotel-room hit on Mabhouh was dressed up as death by natural causes but was uncovered more than a week later when UAE police launched a murder probe at Hamas's urging.

Dagan, a former general, was appointed in 2002 with a mandate to take the fight to Israel's foes abroad. He won plaudits from successive prime ministers and an unusually long eight-year term.

The Mossad chief's success in other and ongoing operations against Hamas, Hezbollah, Syria and Iran would outweigh any desire by Netanyahu to have him fall on his sword, said the confidant, who also hails from Israel's intelligence community.

There are national priorities here, the confidant said.


LOBBY COUNTERPARTS

Instead, the confidant anticipated Mossad would quietly lobby counterpart agencies in Britain, Ireland, Germany and France -- the countries whose passports were used for the Dubai mission -- to mellow their governments' scrutiny on Israel.

This may not work, given the anger that some of these foreign ministries are signalling, the confidant said. But even if there's only a process of internal deliberation, that might be enough to take the sting out of the recrimination.

In his first term as premier, Netanyahu approved Yatom's plan to poison Hamas head Khaled Meshaal in Amman. The Mossad assassins, posing as Canadians, fumbled the attack and were arrested by Jordan after seeking refuge at the Israeli embassy.

Israel had to make amends, such as with Yatom's resignation, because in that case, our men were prisoners, which meant both proof of involvement and that concrete action was required to recover them, the confidant said.

Netanyahu was also mindful of the need to repair relations with Jordan, one of two Arab nations to have recognized Israel. By contrast, the UAE has no formal ties with the Jewish state, though it does admit select Israelis for trade, sport or talks.

Israel's most pressing domestic blowback from Dubai appears to be in the prospect that the seven of its citizens unwittingly identified as suspects could be be subject to prosecution abroad. This could complicate things for Dagan, though the real legal risks are not at all clear yet, the confidant said.

Dagan, 64, is scheduled to retire at the end of the year. While Netanyahu could seek cabinet endorsement to keep him on longer, the confidant described that as improbable: There was already some grumbling about his last extension. It doesn't matter how good you are -- no one's immune from complacency. A security agency, like any corporation, needs a regular turnover at the top to keep its edge. (Editing by Ralph Gowling)