These are the least possible sentences, and we have used the ultimate of Islamic kindness and generosity

Judiciary chief Hossein Ali Amiri

The trial had concerned some international Jewish groups and western countries over fears that the men had not received a fair trial under Iran's Islamic judicial system.

Human rights groups also questioned the fairness of the closed-door court with no jury and the judge also acting as prosecutor.

'Least possible sentences'

Hamid Tefilin, a shoe salesman, and Asher Zadmehr, a university professor - who had both received the highest prison terms of 13 years - had their sentences slashed to nine and seven years respectively.

Most of the remaining men had their sentences reduced by two years. Time served in prison since the men were arrested in 1999 will also be deducted, bringing release for some very close.

"These are the least possible sentences and we have used the ultimate of Islamic kindness and generosity," said the judiciary chief of Fars province, Hossein Ali Amiri.

Esmail Naseri: "Israel is the main winner"

Despite the shorter terms, the group's defence lawyer, Esmail Naseri, expressed his disappointment.

"In our view, Israel is the main winner from this verdict. We are unhappy, above all because the charge of collaborating with the Israeli regime has been maintained," he said.

"We thought it should have been quashed because Israel is not a state recognised by Iran... It amounts to an Iranian court recognising Israel, which could raise a political problem."

According to Iranian law, the men could have faced death sentences.

The acquittals of five others involved in the case - three other Iranian Jews and two Muslims - were upheld.

Death threats

On Wednesday Mr Naseri told the BBC he had received death threats during the case following severe pressure to admit his clients were guilty.

According to the BBC's regional analyst Sadeq Saba, the case is deeply entangled with the power struggle going on between Iranian leaders.

Supporters of reformist President Mohammad Khatami have been keen to resolve the issue as soon as possible in order to limit damage.

President Khatami has been keen to see the case resolved

However, many fear that hardline conservatives will use the case to tarnish Mr Khatami's international image.

The case has also focused attention on the country's Jewish community, the oldest and biggest in the Middle East outside Israel.

Despite the bitter enmity between the Islamic Republic and Israel, the Jewish community has clung on and survived in Iran, albeit in dwindling numbers.