Israeli Prime Minister Ariel Sharon has forbidden the practice until now, these sources said, speaking on condition of anonymity.
The Israeli statements were confirmed by more than a half dozen former and currently serving U.S. foreign policy and intelligence officials in interviews with United Press International.
But an official at the Israeli Embassy in Washington told UPI: "That is rubbish. It is completely untrue. Israel and the United States have such a close and co-operative intelligence relationship, especially in the field of counter-terrorism, that the assertion is ludicrous."
With the appointment of Meir Dagan, the new director of Israel's Mossad secret intelligence service, Sharon is preparing "a huge budget" increase for the spy agency as part of "a tougher stance in fighting global jihad (or holy war)," one Israeli official said.
Since Sharon became Israeli prime minister, Tel Aviv has mainly limited its practice of targeted killings to the West Bank and Gaza because "no one wanted such operations on their territory," a former Israeli intelligence official said.
Another former Israeli government official said that under Sharon, "diplomatic constraints have prevented the Mossad from carrying out 'preventive operations' (targeted killings) on the soil of friendly countries until now."
He said Sharon is "reversing that policy, even if it risks complications to Israel's bilateral relations."
A former Israeli military intelligence source agreed: "What Sharon wants is a much more extensive and tough approach to global terrorism, and this includes greater operational maneuverability."
Does this mean assassinations on the soil of allies?
"It does," he said.
"Mossad is definitely being beefed up," a U.S. government official said of the Israeli agency's budget increase. He declined to comment on the Tel Aviv's geographic expansion of targeted killings.
An FBI spokesman also declined to comment, saying: "This is a policy matter. We only enforce federal laws."
A congressional staff member with deep knowledge of intelligence matters said, "I don't know on what basis we would be able to protest Israel's actions." He referred to the recent killing of Qaed Salim Sinan al Harethi, a top al Qaida leader, in Yemen by a remotely controlled CIA drone.
"That was done on the soil of a friendly ally," the staffer said.
But the complications posed by Israel's new policy are real.
"Israel does not have a good record at doing this sort of thing," said former CIA counter-terrorism official Larry Johnson.
He cited the 1997 fiasco where two Mossad agents were captured after they tried to assassinate Khaled Mashaal, a Hamas political leader, by injecting him with poison.
According to Johnson, the attempt, made in Amman, Jordan, caused a political crisis in Israeli-Jordan relations. In addition, because the Israeli agents carried Canadian passports, Canada withdrew its ambassador in protest, he said. Jordan is one of two Arab nations to recognize Israel. The other is Egypt.
At the time, Israeli Prime Minister Binyamin Netanyahu said, "I have no intention of stopping the activities of this government against terror," according to a CNN report.
Former CIA officials say Israel was forced to free jailed Hamas founder Sheikh Ahmad Yassin and 70 other Jordanian and Palestinian prisoner being held in Israeli jails to secure the release of the two would-be Mossad assassins.
Phil Stoddard, former director of the Middle East Institute, cited a botched plot to kill Ali Hassan Salemeh, the mastermind of the 1972 Munich Olympics massacre. The 1974 attempt severely embarrassed Mossad when the Israeli hit team mistakenly assassinated a Moroccan waiter in Lillehammer, Norway.
Salemeh, later a CIA asset, was killed in Beirut, Lebanon, in 1976 by a car bomb placed by an Israeli assassination team, former U.S. intelligence officials said.
"Israel knew Salemeh was providing us with preventive intelligence on the Palestinians and his being killed pissed off a lot of people," said a former senior CIA official.
But some Israeli operations have been successful.
Gerald Bull, an Ontario-born U.S. citizen and designer of the Iraqi supergun -- a massive artillery system capable of launching satellites into orbit, and of delivering nuclear chemical or biological payloads from Baghdad to Israel -- was killed in Belgium in March 1990. The killing is still unsolved, but former CIA officials said a Mossad hit team is the most likely suspect.
Bull worked on the supergun design -- codenamed Project Babylon -- for 10 years, and helped the Iraqis develop many smaller artillery systems. He was found with five bullets in his head outside his Brussels apartment.
Israeli hit teams, which consist of units or squadrons of the Kidon, a sub-unit for Mossad's highly secret Metsada department, would stage the operations, former Israeli intelligence sources said. Kidon is a Hebrew word meaning "bayonet," one former Israeli intelligence source said.
This Israeli government source explained that in the past Israel has not staged targeted killings in friendly countries because "no one wanted such operations on their territory."
This has become irrelevant, he said.
Dagan, the new hard-driving director of Mossad, will implement the new changes, former Israeli government officials said.
Dagan, nicknamed "the gun," was Sharon's adviser on counter-terrorism during the government of Netanyahu in 1996, former Israeli government officials say. A former military man, Dagan has also undertaken extremely sensitive diplomatic missions for several of Israel's prime ministers, former Israeli government sources said.
Former Israel Defense Forces Lt. Col. Gal Luft, who served under Dagan, described him as an "extremely creative individual -- creative to the point of recklessness."
A former CIA official who knows Dagan said the new Mossad director knows "his foreign affairs inside and out," and has a "real killer instinct."
Dagan is also "an intelligence natural" who has "a superb analyst not afraid to act on gut instinct," the former CIA official said.
Dagan has already removed Mossad officials whom he regards as "being too conservative or too cautious" and is building up "a constituency of senior people of the same mentality," one former long-time Israeli operative said.
Dagan is also urging that Mossad operatives rely less on secret sources and rely more on open information that is so plentifully provided on the Internet and newspapers.
"It's a cultural thing," one former Israeli intelligence operative explained. "Mossad in the past has put its emphasis on Humint (human intelligence) and secret operations and has neglected the whole field of open media, which has become extremely important."