The story...

...a group (perhaps multiple groups) of young Israeli men, in which some where found out to be Mossad agents, were filming the Twin Towers on 9/11 before the attack and then were celebrating and taking pictures of themselves with the burning WTC in the background...
http://killtown.blogspot.com/2005/11/dancing-israelis-on-911.html

Our take...

This Fox News article is one of the most quoted sources of the foreknowledge claim:

Friday, September 14, 2001

"The New York Times reported Thursday that a group of five men had set up video cameras aimed at the Twin Towers prior to the attack on Tuesday, and were seen congratulating one another afterwards." - FOX
http://www.foxnews.com/story/0,2933,34250,00.html

This is referring to another article, though. We browsed the New York Times archive and believe this is what Fox were talking about:

Separately, officials said a group of about five men were now under investigation in Union City, suspected of assisting the hijackers. In addition, the officials said the men had apparently set up cameras near the Hudson River and fixed them on the World Trade Center. They photographed the attacks and were said to have congratulated each other afterward, officials said.

AFTER THE ATTACKS: THE INVESTIGATION; BIN LADEN TIE CITED
By DAVID JOHNSTON AND JAMES RISEN
Published: September 13, 2001
New York Times

The setting up of the cameras “prior to the attacks” is an inference from the phrase “they photographed the attacks” in this report. It’s a reasonable literal interpretation, but that doesn’t necessarily make it true: a New York resident who took photos of what happened on 9/11 may well describe those images as “my pictures of the 9/11 attacks”, for instance, even if they didn’t include any shots of the initial plane impacts. 

Even if the unnamed officials were saying the cameras were set up before the attack, these may be reports of the allegations they are investigating. The report does talk of the men “apparently” setting up cameras near the Hudson River, for instance, and that they said “said” to have congratulated each other afterwards. The report itself is very early, published on the 13th, perhaps written less than 24 hours after they were arrested, so it would be surprising if these officials had reached definitive conclusions.

Of course it’s difficult to form meaningful conclusions by simply analysing one or two words. That is demonstrated more than adequately here:

Several of the detainees discussed their experience in America on an Israeli talk show after their return home. Said one of the men, denying that they were laughing or happy on the morning of Sept. 11, "The fact of the matter is we are coming from a country that experiences terror daily. Our purpose was to document the event."

How did they know there would be an event to document on 9/11?
http://www.whatreallyhappened.com/fiveisraelis.html

Here it’s suggested that saying “our purpose was to document the event” is in itself somehow suspicious, that it indicates foreknowledge. Why? We’ve no idea. Every single person who pointed a camera at the WTC on 9/11 did so because they wanted to “document the event”. The phrase indicates precisely nothing at all.

Let’s abandon the second-hand reports, then, and look at what the witness to this filming actually said. This ABC article crops up a lot:

Maria, who asked us not to use her last name, had a view of the World Trade Center from her New Jersey apartment building. She remembers a neighbor calling her shortly after the first plane hit the towers. She grabbed her binoculars and watched the destruction unfolding in lower Manhattan. But as she watched the disaster, something else caught her eye.

Maria says she saw three young men kneeling on the roof of a white van in the parking lot of her apartment building. "They seemed to be taking a movie," Maria said.

The men were taking video or photos of themselves with the World Trade Center burning in the background, she said. What struck Maria were the expressions on the men's faces. "They were like happy, you know … They didn't look shocked to me. I thought it was very strange," she said.

She found the behavior so suspicious that she wrote down the license plate number of the van and called the police. Before long, the FBI was also on the scene, and a statewide bulletin was issued on the van.

The plate number was traced to a van owned by a company called Urban Moving. Around 4 p.m. on Sept. 11, the van was spotted on a service road off Route 3, near New Jersey's Giants Stadium. A police officer pulled the van over, finding five men, between 22 and 27 years old, in the vehicle. The men were taken out of the van at gunpoint and handcuffed by police.
ABC source

There’s nothing here to support the foreknowledge claim. The time frame as to when she noticed them is vague, but it definitely came after the call from a neighbour, which itself followed the first plane hitting the towers.

What’s more, if you look at the full 20/20 transcript from which this story is derived, you find that Maria says she saw the van park after she’d been watching the WTC for a few minutes. And so they did not film the first impact. The report also talks about other issues involved with this story, so we’ve not snipped any of those and you should read the whole lot, however we’ve emphasised Maria’s testimony so that’s easier to pick out:

Copyright 2002 American Broadcasting Companies, Inc. 
ABC News

SHOW: 20/20 (10:00 PM ET) - ABC

June 21, 2002 Friday

HEADLINE: Five Israeli men arrested soon after 9/11 might have been working for Israeli intelligence, but likely did not know beforehand about the attacks

ANCHORS: BARBARA WALTERS; JOHN MILLER

Announcer: From Times Square in New York, Barbara Walters and John Miller.
BARBARA WALTERS, co-host:
Good evening, and welcome to 20/20.

Tonight, a very important 20/20 investigation into a very ugly story that's made its way around the world since September 11th. The story is that Israel knew more than it would like to admit about the terrorist attack in this coun-try. It's a rumor, but in some Arab countries--including Saudi Arabia, which I visited earlier this year--even educated people told me that they believe it is absolutely true. So how could such a rumor take hold?
And John, I know that you have been looking into this now for months.

JOHN MILLER, co-host:
We have. And when you try to trace the roots of this rumor, all roads seem to lead to the arrest of of group of Israeli men on the very day of the attacks, men who seemed coincidentally to be in the right place at the right time, and behaving strangely. Why did they become the focus of months of investigation by the FBI and the CIA? Why were they repeatedly asked by the FBI if they had any advance knowledge of the attacks, and in fact, did they? Surprisingly, the tip that led to the arrests of these five men did not come from a spy satellite, it came from a New Jersey housewife.

(VO) On the morning of September 11th, Maria--who asked us not to use her last name--was home preparing for her day, when she got a call from a friend who lived upstairs in the same New Jersey high-rise.

MARIA: She was sitting when she heard a noise, at the same time she felt like it--it shook--like the building shook, she said. She called me immediately. She said, 'You know, there's--there's something wrong, look at your window by the twin towers.' So I grab my binoculars and I could see the towers from my window.
And this is where I, you know, I'm looking. I saw the smoke from the top, just from the top of the towers.

MILLER: (VO) After watching for a little while, something caught Maria's at-tention in the parking lot below her window.

MARIA: Like a few minutes must have gone on, and all of a sudden down there I see this van park. And I see three guys on top of the van, and I'm trying, you know, to look at the building but what caught my attention, they seemed to be taking a movie.

MILLER: (VO) Maria says the three young men were kneeling on the roof of a white van. It was parked right here. They were taking pictures of each other with the World Trade Center burning in the background.

MARIA: And I could see that they were, like, happy, you know? They--they--they weren't--they didn't look shocked to me, you know? They didn't look shocked. I thought it was very strange.

MILLER: (VO) Maria found the behavior so suspicious she wrote down the li-cense plate number. She and her husband, Pat, called the police. Soon police and the FBI were on the scene. The license plate was traced to a van owned by a company called Urban Moving. A state-wide alarm was transmitted over the police radio.
Deputy Chief ROBERT DEL PRIORE (Weehawken Police Department): It stated in--in effect, to be on the lookout for an Urban Movers van with a license plate number that was given out.

MILLER: (VO) Around 4 PM that day, this white Chevy van was stopped by police near Giants Stadium in New Jersey. Inside it were five men, all in their 20s. These grainy photos of the event were taken by a man who witnessed the scene from a nearby hotel.

(OC) The van was stopped right here. Police pulled the five men out at gun point and handcuffed them. And almost immediately, police say, there was plenty to be suspicious of. One of the men had $4700 in cash hidden in his sock. An-other was carrying two foreign passports. A box cutter was found in the van. But perhaps the biggest surprise for police was when the five men identified themselves as being Israeli.

(VO) According to Officer Scott DeCarlo's police report, one of the passen-gers told him, "We were on the West Side Highway in New York City during the in-cident," not behind Maria's apartment building in New Jersey. The driver told them, 'We are Israeli. We are not your problem. Your problems are our problems. The Palestinians are the problem.'
The men ranged in age from 22 to 27. The driver was Sivan Kurzberg. The other passengers included his brother, Paul Kurzberg, Yaron Shmuel, Oded Ellner and Omer Marmari. The men, who all said they worked for Urban Moving, were taken to this new Jersey State Police Station and questioned by the FBI.

(OC) ABC News has learned that after the five men were taken to jail, the en-tire case was transferred out of FBI's criminal division and into its foreign counterintelligence section, which is responsible for espionage cases. One rea-son for the shift, according to our sources, is that the FBI believed Urban Mov-ing may have provided a cover for agents of Israeli intelligence. Urban Moving is owned by Dominic Suter (ph), an Israeli businessman. After the five men were arrested in one of his vans, the FBI got a warrant and searched the company's offices.

Ms. PAULINE STEPKOVICH: (ph) The FBI was here hours. Hours.

MILLER: (VO) Pauline Stepkovich, who lives right across the street from Urban Moving, watched as federal investigators went in and out of the building.

Ms. STEPKOVICH: Two SUVs were filled up with between nine and 12 boxes and computers.

MILLER: (VO) Dominic Suter's attorney confirms that the FBI removed boxes of documents and a dozen computer hard drives from Urban Moving. He insists his client answered all of the FBI's questions. But a few days later, when the FBI wanted to interview Mr. Suter again, he was gone.
Our 20/20 cameras took these pictures inside Urban Moving some three months later. And as you can see, it looked like Suter shut down the business in a big hurry. Cell phones and personal effects were lying around Suter's office, the phones were still connected with hundreds of messages waiting. There were job applications to be processed, and the property of dozens of families packed in the warehouse. Dominic Suter's company closed down in such a hurry, some of their customers, like Frank Crisp (ph), were left hanging.

Mr. FRANK CRISP: They were--they were really short on the--on the phone, and it was like they wanted to get off and--and get out.

MILLER: (VO) Dominic Suter cleared out of his New Jersey home, too, and he'd put it up for sale. Suter and his family had returned to Israel. We called him there, but he refused to talk to us about Urban Moving.
Was Israeli intelligence using Urban Moving as a cover?

(OC) And if not, why did the company suddenly shut down after the five em-ployees arrested? Why did the owner abruptly leave the country, leaving behind a significant investment, a thriving business, and a lot of unhappy customers? The FBI needed answers to three important questions: Who were these men? What brought them to that parking lot on the morning of September 11th? And did they have any advanced knowledge of what was going to happen that day?

Mr. STEVE GORDON: So you got a group of guys that are taking pictures on top of a roof, of the World Trade Center, they're speaking a foreign language, they got two passports on them, one's got a wad of cash on him and they've got box cutters. Now that's a scary situation.

MILLER: (VO) Steve Gordon was the attorney for the five Israeli detainees. We interviewed him back in October, shortly after 20/20 began investigating this incident.
(OC) So who are these kids, and how did they get entangled in this?

Mr. GORDON: They're five young kids who--who left Israel, tried to leave a war zone, if you so will. They came to America. They came here, initially, for a vacation. They came here to work and they started work for a moving company.

MILLER: Now, the witness that we interviewed said that they were acting very strangely.

Mr. GORDON: If her story is to be believed, then of course I don't believe I nor anybody else would--would condone any type of behavior.

MARIA: You know, they're laughing. They're laughing. One of them, I no-ticed, distinctively, put his hand on top of the other guy why they're filming, on top of his shoulder.

Mr. GORDON: Indeed, I did ask them about that, and they denied celebrating, they denied rejoicing.

MILLER: So were they horsing around?

Mr. GORDON: They were not horsing around. And the very first question that I asked Mr. Ellner was, 'Tell me what--what happened.' He said, 'We were taking pictures.' Were they smiling in those photographs? Perhaps they were smiling.

MILLER: (VO) Sources tell 20/20 the FBI developed film from a camera taken from the Israelis, and that it shows the three on top of the white van were smiling and appeared to be clowning around. The five Israelis were held at this federal jail for allegedly overstaying their visas.

(OC) In fact, within two weeks, an immigration judge routinely ordered them deported. But that is when, according to sources who spoke to 20/20, the FBI and CIA put a hold on the case. And over the next two months, some of the men were held in solitary confinement, questioned repeatedly and some of them were given up to seven lie detector tests. Clearly this was more than your average immigration case.

(OC) So when they were being questioned and when they were being polygraphed, what were the questions they were being asked?

Mr. GORDON: I believe the questions surrounded what they were doing in Amer-ica, what were they--were doing on September 11th with regard to whether or not they actually had any involvement in the World Trade Center incident. They were asked questions if they had ever been approached by or hired by any non-United States intelligence community.

MILLER: (VO) Since their arrest, there has been plenty of speculation and ru-mor about who these men were and what they were doing that morning. Eventually The Forward, a respected Jewish newspaper in New York, reported that the FBI concluded that at least two of them were Mossad operatives. That is, agents of Israeli intelligence.

Mr. VINCE CANNISTRARO: When the federal investigators checked the names of the people who had been arrested through a national intelligence database, some of the names came up as hits.

MILLER: (VO) Vince Cannistraro is a former chief of operations for counter-terrorism with the Central Intelligence Agency. Now he's a consultant with ABC News. He says many in the US intelligence community believe that some of the men arrested in the white van were in the US working for Israeli intelligence. They speculate that Urban Moving was being used by Israel as an intelligence front.

Mr. CANNISTRARO: ...set up or exploited for the purpose of launching an op-eration, an intelligence operation, against radical Islamics in the area, par-ticularly in the New Jersey/New York area.

MILLER: (VO) Under the scenario, the spying operation was not aimed against the United States, but at penetrating or monitoring radical fund-raising and support networks in Muslim communities like Patterson, New Jersey, which was one of the places where several of the hijackers lived in the months prior to 9/11.

Mr. CANNISTRARO: Israeli government has been concerned about activity of radical Islamic groups in the United States. There could be a support apparatus to Hamas and Islamic Jihad, two groups which are conducting the majority of the suicide bombings in Israel.

MILLER: (VO) The suspicion that some of the young men might be with Israeli intelligence, coupled with the account of their odd behavior on the van, raised serious questions for investigators.

Mr. CANNISTRARO: The fear of some of the FBI investigators in this particular case was that this group had some advanced knowledge of what was going to happen on 9/11. And once they understood that there was an Israeli connection--an Is-raeli intelligence connection--they became very disturbed, because the implica-tion was that the Israelis may have had some advanced knowledge of the events of 9/11 and hadn't told us.

MILLER: (VO) For the FBI, deciphering the truth about the five Israelis proved to be difficult. One of them, Paul Kurzberg, refused to take a lie de-tector test. But after 10 weeks in jail he did take the polygraph and failed it. One of his lawyers later told us Kurzberg had been reluctant to take the test because he had once work for Israeli intelligence in another country. Later, he took a second polygraph test. His lawyer says the results were more favorable.
Sources tell 20/20, after high-level negotiations between Israeli and US gov-ernment officials, a settlement was worked out. And after 71 days, the five Is-raelis were taken out of jail, put on a plane and deported back home. 20/20 traveled to Israel to try and meet the five young men and ask them, were they part of an Israeli intelligence operation in the United States. We went to a small town outside of Jerusalem to meet Paul Kurzberg.

Mr. PAUL KURZBERG: (Through translator) I went to work over there because, I don't know, the situation here is not the best.

MILLER: (VO) This is Kurzberg's younger brother, Sivan, who was one of the three men on top of the van that morning.

Mr. SIVAN KURZBERG: (Through translator) They took away two months of my life. During that time I was supposed to be on a trip that I had planned when I started my military service.

MILLER: (VO) Although Paul and Sivan would not talk with us about the inci-dent, Sivan and two of the other detainees did go on an Israeli talk show after their return. Oded Ellner denied they were laughing or happy that today.

Mr. ODED ELLNER: (Through translator, from Israeli talk show) Nothing of the kind, the fact of the matter is, we are coming from a country that experiences terror daily. Our purpose was to document the event.

MILLER: (VO) Ellner also complained that they had been mistreated and sub-jected to repeated interrogations.

Mr. ELLNER: (Through translator, from Israeli talk show) And at that point, we were taken for another round of questioning, this time related to our alleg-edly being members of Mossad.

MILLER: (VO) Their attorney in Israel is Ram Horvitz.

Mr. RAM HORVITZ: This story about the five boys being connected with Israeli intelligence is the most stupid and ridiculous story that I ever heard, and it is nonsense. I don't know who invented this story.

Mr. MARK REGAV: These men were not involved in any way in any intelligence operation in the United States.

MILLER: (VO) Mark Regav, the spokesman for the Israeli embassy in Washington, goes even further to say the issue was never even discussed with the US offi-cials.

Mr. REGAV: These five Israelis were not involved in any intelligence opera-tion in the United States. And the Americans, the American intelligence au-thorities, have never raised this issue with us. The story is simply false.

MILLER: (VO) Source tell 20/20 there is still debate within the FBI over whether or not the young men were spies. But many in the US intelligence commu-nity believe that some of the men were engaged in espionage for Israel. However, sources also tell us, even if they were spies, there was no evidence to conclude they had advanced knowledge of the terrorist attacks of 9/11.

Mr. CANNISTRARO: The investigation, at the end of the day, after all of the polygraphs, all of the field work, all of the cross-checking, the intelligence work, concluded that they probably did not have advanced knowledge of 9/11.

WALTERS: John, so the FBI has concluded that these men did not have any ad-vanced knowledge of the attack on the Trade Center.

MILLER: And they seem to be comfort with that conclusion.

WALTERS: OK. Then what were they doing looking at the World Trade Center then?

MILLER: They say that they read about the attack on the Internet, went to the roof of the moving company, couldn't really see it, and then went to the higher ground to get a better view and to take pictures.

WALTERS: Well, all right, but why were they smiling?

MILLER: Well, that's been the most difficult question. And the only explana-tions we've had, both from the lawyer and from the Israeli government, is chalk-ing that up just to immature conduct.

WALTERS: But the bottom line is, that there is no evidence that these men knew about the attacks in advance.

MILLER: No. And I think the FBI and the CIA spent a great deal of time try-ing to drill down to that answer and found no proof of that.

WALTERS: Well, I hope that we have put this rumor to rest once and for all.

MILLER: We've certainly tried.

WALTERS: We'll be right back.

This doesn’t completely end the issue, as there are other reports of them “dancing” prior to this (also denied). Their lawyer said:

On the day of the disaster, three of the five boys went up on the roof of the building where the company office is located," said Gordon. "I'm not sure if they saw the twin towers collapse, but, in any event, they photographed the ruins right afterwards. One of the neighbors who saw them called the police and claimed they were posing, dancing and laughing, against the background of the burning towers. The five denied dancing. I presume the neighbor was not near them and does not understand Hebrew. Furthermore, the neighbor complained that the cheerful gang on the roof spoke Arabic. As far as I understand it, that neighbor has had previous problems with the company, and she could have been waiting for an opportunity to avenge the owners.

Anyhow, the three left the roof, took an Urban truck, and drove to a parking lot, located about a five-minute drive from the offices. They parked, stood on the roof of the truck to get a better view of the destroyed towers and took photographs. A woman who was in the building above the lot testified that she saw them smiling and exchanging high-fives. She and another neighbor called the police and reported on Middle-Eastern looking people dancing on the truck. They copied and reported the license plates.
http://www.fpp.co.uk/online/02/03/WTC/spies10.html

However, there’s still no witness evidence to support the claim that they were set up and filming before the attacks occurred.

This page is intended to focus solely on the foreknowledge issue, but plainly (as you can see above) there are other considerations, too. By all means read the Killtown article, WhatReallyHappened page and anything else you can find for more on these, but be sure you check sources carefully. We’ve seen this story used as evidence that the Israelis’ van contained explosives, for instance:

Three arrested with van full of explosives

4:27:11 AM

Reports from New York are saying three people have been arrested with a van of explosives.

The van was stopped along the New Jersey turn-pike near the George Washington Bridge.

It was not clear why police stopped the van but when they did they found it was laden down with tonnes of explosives. 
http://archives.tcm.ie/breakingnews/2001/09/12/story23429.asp

But mysteriously this correction from the same source, issued less than 8 minutes after the first story, doesn’t get the same attention:

Police confirm arrests but deny explosives find

4:34:43 AM

NYPD officers have confirmed the arrest of three men on the New Jersey turn-pike.

However officials denied any explosives were found in the van.

Officials declined to say why exactly the men had been arrested. 

http://archives.tcm.ie/breakingnews/2001/09/12/story23430.asp

Question everything you read, then (even here). And we may return to this topic at a future date.