Benjamin Netanyahu has demanded that Israel's security agents be allowed to get on with their jobs "quietly" after Australia called for an explanation over the jailing and apparent suicide of Ben Zygier, an alleged Mossad spy known as Prisoner X.
As Australia opened an inquiry into the death, Mr Netanyahu warned that full disclosure could "badly damage" state security.
The so-called Prisoner X case remains shrouded in mystery and has embarrassed Bob Carr, Australia's foreign minister, who was initially unaware that his own department knew Israel had secretly tried and imprisoned the Australian-Israeli citizen.
Australian intelligence officials had reportedly questioned Mr Zygier about his spying activities, which allegedly included changing names on numerous occasions and obtaining multiple Australian passports.
Mr Zygier (34), a Jewish father of two, was also known as Ben Alon, Ben Allen and Benjamin Burroughs. He died in a maximum security cell, supposedly under continuous surveillance, on December 15, 2010.
Israel initially sought to gag the country's media from reporting the affair but has partially lifted the order. The justice ministry said Mr Zygier received access to lawyers and family. It is now considering releasing the findings by a district court judge who investigated his death and found it was a suicide.
In his first public remarks on the case, Mr Netanyahu, appeared to suggest that disclosing details would be against Israel's interests.
"The overexposure of security and intelligence activity could harm, sometimes severely, state security," he said.
"Therefore, in any discussion, the security interest cannot be made light of, and in the reality in which the state of Israel lives, this must be a main interest. We are not like other countries. We are an exemplary democracy and maintain the rights of those under investigation and individual rights no less than any other country.
"However, we are more threatened and face more challenges; therefore, we must maintain proper activity of our security agencies. And therefore, I ask all of you, let the security forces do their work quietly so that we can continue to live in security and tranquillity in the state of Israel."
Israel's parliament announ-ced last night that it would conduct an "intensive" inquiry into the affair.
Israel has refused to state the reason for Mr Zygier's arrest, citing only national security concerns.
It is believed that he committed some form of treason.
It has emerged that in the months before his arrest, Australia's domestic intelligence agency, ASIO, had begun investigating whether Australian-Israeli citizens were obtaining multiple passports for use of Israel's spy agency.
Mr Carr disclosed last week that Australia learned of the arrest "through intelligence channels" on February 24, 2010.
He ordered a review last week of his department's handling of the affair but said yesterday that it would be a more extensive inquiry that would put questions to Israel about the circumstances of Mr Zygier's death.
"I need to know what the contact was between Australian agencies and those of Israel, and I need to see what the Israelis want to tell Australia," he said.
"We want to give (Israel) an opportunity to submit to us an explanation of how this tragic death came about.
"The report will canvass all consular contact between Australia and between Israel, contact of any other kind including contact of security agencies."
The arrest of Mr Zygier came less than two weeks after it emerged that dozens of fake passports had been used in a suspected assassination by Mossad of Mahmoud Al-Mabhouh, a leading arms dealer for Hamas, in Dubai.
At about the same time as Mr Zygier was arrested, it emerged that several of the passports were Australian. Australia, along with Britain and several other countries whose passports were used, protested to Israel. (© Daily Telegraph, London)