
The two individuals were believed to be in the early stages of gathering intelligence on potential Israeli targets, the Kathimerini Cyprus newspaper said without citing sources.
The paper added that the Iranians were political refugees in contact with a person linked to the Iranian Revolutionary Guard Corps.
A senior Cyprus official declined to comment, citing policy on issues concerning national security.
Reuters was unable to verify the details in the newspaper report.
Barely a 40-minute flight from Israel, Cyprus is a popular holiday and investment destination for thousands of Israelis.
Israel’s prime minister Benjamin Netanyahu in June said that an Iranian attack against Israeli targets in Cyprus had been thwarted. Tehran denied being behind any alleged plot to attack Israelis in Cyprus.