Israel has denied that a man identified by the ABC as an Australian-Israeli Mossad agent who committed suicide in jail had any contact with Australia's security services, as a court backed its government's claims that he hanged himself.

The man, identified by the ABC's Foreign Correspondent as Australian citizen Ben Zygier, died in top-secret conditions in Ayalon prison, near Tel Aviv, in December 2010.

Sources told the ABC that Zygier was arrested by his own spymasters after they believed he told the Australian Security Intelligence Organisation (ASIO) about every aspect of his work with the Israelis.

Israeli prime minister Benjamin Netanyahu's office, which oversees Israel's intelligence services, denies this.

"Following recent publications, the prime minister's office stresses that the late Mr Zygier had no contact with the Australian security services and organisations," the office said, in Israel's first mention of Zygier by name.

Until now, Israel had acknowledged only that a prisoner with a foreign passport had committed suicide and went to extreme lengths to cover up the story.

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It imposed a media blackout that was only partially eased last week after the story was broken by the ABC.

The premier's office, in charge of the Mossad spy agency, issued the statement on the same day a court loosened the tight gag order and published part of an inquest, which included a verdict that an unnamed detainee with dual nationality had committed suicide in prison on December 15, 2010.

The court said the 34-year-old "was found hanging by a sheet in the shower of his detention cell".

All the evidence "ruled out the involvement of another person in (his) death," the report read.

"There was no dispute that it was a wilful act of the deceased which brought about his death by suicide."

The inquest also noted traces of substances in the deceased's body and abrasions on his arm.

"The deceased was found hanging in the shower of his detention cell, with a sheet around his neck tied to the window of the bathroom," the report read.

The coroner quoted in the report noted there were also "light abrasions on his left forearm caused by a dry blow that didn't contribute to the death."

He also said "a small quantity of a sedative was found in (his) blood, not alcohol or drugs," without it changing his opinion that the cause of death was hanging.

The inquest also heard that the Israel Prisons Service (IPS) could be guilty of "negligence in causing the detainee's death".

Zygier's cell was under 24-hour surveillance but Israeli media reports said there was no camera in the bathroom, to maintain the prisoner's privacy.

An internal inquiry by the IPS, parts of which were quoted by Maariv newspaper, showed that guards only looked at the footage from his cell every "20 to 25 minutes" because he was not classed as a prisoner with suicidal tendencies.

A justice ministry spokesman said state prosecutors would decide whether charges would be brought.

It is understood the cause of death report was completed in mid December.

The ABC has not been able to confirm whether prosecutors are indeed investigating.

The ABC can reveal though that the foreign affairs minister at the time of Zygier's death, Kevin Rudd, has requested a full briefing on the Department of Foreign Affairs' internal review of the case.

Mr Rudd had held a press conference with the then Israeli foreign affairs minister Avigdor Lieberman in Israel the day before Zygier was found dead.

The tombstone of Ben Zygier at Chevra Kadisha Jewish Cemetery in Melbourne. ( AAP: Julian Smith )

'Something more serious'

On Monday, the ABC said Zygier was arrested after giving ASIO a comprehensive account of a number of Mossad operations, including plans for a top-secret mission in Italy that had been years in the making.

In its denial overnight, Mr Netanyahu's office stressed that "between Israel and all its organisations and Australia and the Australian security organisations, there is excellent cooperation, full coordination and full transparency in dealing with issues at hand".

Zygier was held under alias to stem serious harm to national interests, Israel says, but has not given any other details.



Former foreign minister Alexander Downer said he believed Zygier's arrest was over something "more serious" than just a leak to ASIO.

"I suspect it was something more serious than just sharing information with ASIO," he told ABC radio yesterday.

Israel's parliament is to launch an "intensive" inquiry into the arrest and death of Zygier, who immigrated to Israel around 2001.

Israeli internal security minister Yitzhak Aharonovitch told parliament that Zygier had received frequent family visits and been "supervised by mental-health support and treatment systems, both external and those of the Prisons Service".

Zygier also consulted with Israeli lawyers, one of whom, Avigdor Feldman, said he saw the married father of two shortly before his death to discuss "grave charges" on which he had been indicted, and the possibility of a plea bargain.

"I met with a balanced person ... who was rationally weighing his legal options," Mr Feldman told Israeli television last week, adding that Zygier had denied the charges against him.

"His interrogators told him he could expect lengthy jail time and be ostracised from his family and the Jewish community.

"There was no heart string they did not pull, and I suppose that ultimately brought about the tragic end."

Australia's foreign ministry is also preparing its own report into Zygier's death.

ABC/wires