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CORRESP
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      Correspondence Letter for X-fone

    Date:
      July 21, 2005

    Ms.
      Cecilia D. Blye, Chief

    Office
      of
      Global Security Risk

    Division
      of Corporate Finance

    Securities
      Exchange Commission

    Washington,
      D.C. 20549 - 5546

    Re:
      Xfone,
      Inc.

    Form
      10-KSB, for the fiscal year ended December 31, 2004

    Filed
      March 31, 2005

    File
      No.
      333-67232

    Dear
      Ms.
      Blye,

    We
      are in
      receipt of your letter dated June 30, 2005. Actually, due to a mistake I
      received this letter only on July 17, 2005. Our counsel made a phone call to
      your office on July 19, 2005, and left word on your voice mail, and also spoke
      with Mr. Jack Guggenheim to update him that we would respond formally in writing
      in the next day or so.

    We
      welcome your assistance in helping us to comply with existing disclosure
      requirements and enhancing our overall disclosure filings.

    Specifically
      addressing your questions regarding page 7 of the Form 10-KSB and the listing
      of
      customers in Iran and North Korea, please note that it appears to be an
      oversight on our part when preparing the Form 10-KSB and listing all the
      countries where we make our services available. At the time, we requested
      information from the database of Swiftnet Limited, our subsidiary based in
      England, which provided the services to these customers. We are submitting
      along
      with this letter the attached report.

    It
      appears that though the services for these customers had been discontinued
      long
      ago, the two countries were left mistakenly on the list and used for the SEC
      filing. The customers from North Korea, CHOI and CHO2 used the email2fax /
      fax
      broadcast services. As of May 2003 they no longer use our services. The
      customers from Iran, PARV and TAVA used the cyber-fax service. Before year
      2001
      they stopped using our services. We do not know exactly how they became clients
      in 1998-1999, but at that time the telecom agents Swiftnet Limited used built
      client base by looking for international clients for those services. Please
      note
      that Xfone, Inc. at that time had not yet been formed.

    We
      do no
      direct or indirect marketing to attract customers from these countries. We
      certainly would do nothing to create any material investment risk to our
      shareholders by doing any activities, both active and passive, with customers
      from such countries or want to violate any US laws regarding any dealings with
      these countries.

    We
      acknowledge that we are responsible for the adequacy and accuracy of the
      disclosure in the filings, staff comments or changes to disclosure in response
      to staff comments do not foreclose the Commission from taking any action with
      respect to the filings and we may not assert staff comments as a defense in
      any
      proceeding initiated by the Commission or any person under the federal
      securities laws of the United States.

              Sincerely
                yours,

              By:
              /s/ Guy
                Nissenson

                Guy
                Nissenson

              Chief
                Executive Officer and President

    Encls:
      Excel Spread Sheet

    CC:
      Mr.
      Larry Spirgel

    Assistant
      Director

    Division
      of Corporate Finance