Erel Margalit pushes task force to combat Internet terror,

Venture capitalist calls for ‘partnership among government, security forces and hi-tech’

Erel Margalit, whose venture capital fund invested $40 million in security company Cyber-ark Software with Goldman Sachs Group Inc. last month, urged Israel to form a task force to tackle Internet hackers and terrorists.

The country’s national defense and its citizens’ private security depend on immediate government action against new, unconventional threats in the virtual world, Margalit said in a letter sent to Prime Minister Binyamin Netanyahu Tuesday.

“Israel is dealing with a new kind of terrorism,” he said, speaking after last week’s hacking attack that exposed more than 15,000 Israeli credit card holders’ details on the Internet. “People are fighting yesterday’s war and cyber defense needs to be dealt with now.”

The comments made by Margalit, who unsuccessfully ran for the leadership of the labor Party last year, echoed those of Deputy Foreign Minister Danny Ayalon, who on December 7 said hacking attacks should be considered terrorism so that appropriate measures could be taken against perpetrators internationally.

Netanyahu announced in May that he planned to set up a National Cyber Directorate, and named its director in December.

“We need to have a partnership between the government, the security forces and the high-tech industry in Israel,” Margalit said. “The challenges are new and they need all disciplines of thought to be dealt with.”

Margalit’s Jerusalem Venture Partners has invested in cyber-defense companies besides Cyber-ark, which offers Internet security to banks and other organizations. His group sold Navajo Systems, which encrypts data before it’s transmitted to a software “cloud,” to Salesforce. Inc. in September.

Netanyahu has stressed the importance of building a strong cyber defense for the country that would also have the benefit of developing products that could offer solutions worldwide, boosting the economy.

“The prime minister has understood for some time the significance of this issue, and that is why he established the National Cyber Directorate,” said Mark Regev, a spokesman for Netanyahu, adding that he couldn’t comment on the prime minister’s correspondence. (Bloomberg)