Israeli businessman Sammy Ofer, whose company Ofer Brothers is embroiled in a scandal over illegal trade with Iran, died at his Tel Aviv home on Friday, a corporate spokesman said. He was 89.

Ofer, a shipping magnate who was one of the founders of the Ofer Brothers Group, died early on Friday after "a difficult period of illness," spokesman Motti Scherf told AFP.

"He died at his home in Tel Aviv earlier today. He had suffered a very long and difficult period of illness," he said, refusing to give further details out of respect for the family's privacy. Press reports suggested he was in the advanced stages of cancer.

Scherf said the funeral would take place in Tel Aviv's Trumpledor cemetery at 4:00 pm (1300 GMT) on Sunday.

Ofer Brothers Group owns a major international shipping business which is under investigation after it was blacklisted by Washington last week for trade with Tehran.

According to the US State Department, Ofer Brothers and its alleged subsidiary, the Singapore-based Tanker Pacific, were involved in selling a tanker to an Iranian firm under sanctions last September.

But the firm has consistently denied any wrongdoing, saying it had no ties to Tanker Pacific and that the State Department had made an "unfortunate mistake."

A statement from the office of Prime Minister Benjamin Netanyahu expressed his "deep regret" at Ofer's death.

"He was a leader of the Israeli business community and by his economic activities in Israel and around the world he made great contributions to the public in the fields of health, culture, society and art," it quoted Netanyahu as saying. "Ofer was a Zionist in everything."

The Romanian-born mogul, whose family moved to the British Mandate of Palestine in 1922 when he was a toddler, was listed by Forbes Magazine earlier this year as one of the top hundred richest people in the world.

According to Forbes' World Billionaires list, Sammy Ofer and his younger brother Yuli own a vast industrial empire worth more than $10.3 billion, with interests spanning from shipping to oil, chemicals, property and banking.

The elderly tycoon's death comes just 10 days after the Ofer Brothers Group was listed as one of seven global firms blacklisted by Washington for supplying petrol and other refined petroleum products to Iran in defiance of sanctions.

The Israeli press quickly uncovered records showing Ofer Brothers vessels had docked at Iranian ports at least 13 times over the past decade, prompting the parliamentary economic committee to meet earlier this week to debate the allegations.

But just 15 minutes into the meeting, the committee chairman abruptly halted the debate after receiving a note from Israel's security services, which warned that such a discussion could be "damaging," prompting a flurry of speculation that the firm may have been helping Israel spy on Iran.

Family friends quoted in the press confirmed that vessels belonging to the firm had docked at Iranian ports -- but said they had done so with explicit permission from the Israeli government.

Israel has for years demanded that the international community take tough measures against Iran over its nuclear programme, which the Jewish state and many other countries suspect masks a weapons drive, despite Tehran's denials.

Ofer's death is likely to further deepen the mystery surrounding the firm's alleged ties to Iran, which has sparked a lively debate over the issue of lucrative business deals conducted under the guise of spying.

High-ranking security officials quoted by the top-selling Yediot Aharonot newspaper earlier this week, said the firm's owners had "performed a significant service for the state of Israel" which at times was "endangering their business."

But other commentators suggested the James Bond element involving a covert tie-up with the Mossad spy agency was just a convenient excuse to further hard-nosed business interests.

"Even if it is true, they cannot use that as an excuse for justifying trade with Iran," Haaretz correspondent Yossi Melman, who is an expert on the Israeli security services, told AFP.

With his passing, "Sammy Ofer will no longer have to explain himself over this affair," Melman said, while admitting that it was "not so much him but his company which had come under scrutiny."

Under Israeli law, Iran is considered as an enemy state and trade with any such country is outlawed under a 1939 law dating back to the British Mandate.

Sammy Ofer leaves behind a wife and two sons, both of whom are involved in the family business.

Eyal Ofer runs the group's property arm and is also a director of cruise line Royal Caribbean, while Idan Ofer is the chairman of Israel Corporation, which is involved in chemicals, energy, technology and shipping (through Zim Shipping), profile information published in Forbes said.