  We present the results of the analysis of RXTE, BATSE and optical/infrared
data of the 1998 outburst of the X-ray transient system XTE J0421+560 (CI Cam).
The X-ray outburst shows a very fast decay (initial e-folding time ~0.5 days,
slowing down to ~2.3 days). The X-ray spectrum in the 2-25 keV band is complex,
softening considerably during decay and with strongly variable intrinsic
absorption. A strong iron emission line is observed. No fast time variability
is detected (<0.5 % rms in the 1-4096 Hz band at the outburst peak). The
analysis of the optical/IR data suggests that the secondary is a B[e] star
surrounded by cool dust and places the system at a distance of >~ 2 kpc. At
this distance the peak 2-25 keV luminosity is ~4 x 10^37 erg/s. We compare the
properties of this peculiar system with those of the Be/NS LMC transient A
0538-66 and suggest that CI Cam is of similar nature. The presence of strong
radio emission during outburst indicates that the compact object is likely to
be a black hole or a weakly magnetized neutron star.
