(JTA) – Shlomo Riskin, the chief rabbi of Efrat, filed a $260,000 countersuit against a resident of the West Bank settlment who had sued Riskin for libel.

Riskin’s lawsuit, which he filed Wednesday in the Jerusalem District Court, alleges that Samuel Wasserman, also a resident of the Efrat settlement in the West Bank, conspired with others to entrap Riskin in a libel suit as payback for Riskin’s support of Wasserman’s ex-wife during the couple’s protracted divorce.

Wasserman, a businessman, sued Riskin, an American-born Orthodox rabbi, last year for libel in a lawsuit that purported to present evidence that Riskin had called Wasserman a “swindler.” According to Wasserman’s lawsuit, Riskin made the assertion to an employee of two U.S.-based businessmen, Elnatan Rudolph and Shimmy Braun.

The employee allegedly approached Riskin for information on whether his employers could trust Wasserman. The two employers walked out of a $1.5 million deal with Wasserman based on Riskin’s negative feedback on Wasserman, according to Wasserman’s lawsuit.

Riskin, however, claims in his countersuit that Wasserman and Rudolph were actually business partners and that Wasserman had Rudolph approach Riskin, anticipating he would speak ill of Wasserman and in order to cook up a libel case against him.

An independent investigation published Friday by Tzedek, a supplement of the Makor Rishon daily, showed Wasserman and Rudolph co-owned a U.S. bank account, raising questions about why Rudolph would need Riskin’s insights about Wasserman.

Approached by Makor Rishon, Wasserman declined to comment on his relationship with Rudolph.

In recent weeks, Israeli media reported extensively about reluctence by Israel Chief Rabbinate’s to extend Riskin’s term as chief rabbi of Efrat, where Riskin enjoys considerable popularity, over Riskin’s perceived progressive views on women’s rights and other issues.

On Thursday, Israel Hayom reported Riskin and rabbinate officials are close to reaching an agreement on the extension of his term.