  For distant extragalactic sources of gamma-rays in the PeV energy range,
interactions of the gamma rays with intergalactic diffuse radiation fields will
initiate a pair cascade. Depending on the magnetic fields in the vicinity of
the source, the cascade can either result in an isotropic halo around an
initially beamed source, or remain more or less collimated. Data recorded by
the HEGRA system of imaging atmospheric Cherenkov telescopes are used to derive
limits on the halo flux from the AGN Mrk 501. This is achieved by comparing the
angular distribution of TeV gamma-rays during the 1997 burst phase -- where
direct photons should dominate -- with the distribution during the 1998/99
quiescent state, where a steady-state halo contribution should be most
pronounced. The results depend on the assumptions concerning the angular
distribution of the halo; limits on the halo flux within 0.5 to 1 degr. from
the source range between 0.1% and 1% of the peak burst flux.
