Israel's intelligence corps has been rocked by a major internal protest over the treatment of Palestinians.

More than 40 former soldiers and current army reservists have signed a letter refusing future service in the Israeli Defence Force (IDF) military intelligence wing, known as Unit 8200.

Unit 8200 is often compared to the United States National Security Agency. It uses sophisticated technology to monitor the lives of Palestinians, gathering information which is then used by Israel's military. It also carries out surveillance overseas.

But the group of soldiers who served in the unit has spoken out about the methods used and the toll they take on innocent civilians in the occupied Palestinian territories.

In witness testimonies, they detail the strategies used by Israel's elite intelligence corps.

These include gathering personal information about a person's sexual preference and using it to blackmail the individual into becoming a collaborator – a Palestinian who hands information to Israeli authorities.

"Any information that might enable extortion of an individual is considered relevant information," one soldier's statement said.

"Whether said individual is of a certain sexual orientation, cheating on his wife, or in need of treatment in Israel or the West Bank – he is a target for blackmail."

Sorry, this video has expired Elite Israeli soldiers revolt over 'extortion' tactics

The veterans believe the surveillance and intelligence gathering by Unit 8200 is not necessary for Israeli national security.

"The notion of rights for Palestinians does not exist at all, not even as an idea to be disregarded," one witness statement said.

"Any Palestinian may be targeted and may suffer from sanctions, such as the denial of permits, harassment, extortion, or even direct physical injury."

In response to the letter, the IDF said in a statement to the ABC: "The Intelligence Corps has no record that the specific violations in the letter ever took place."

It said the unit's mission was to protect Israeli civilians.

"Those who serve in the unit undergo a thorough screening process and intense training, which is unmatched by any of the world's intelligence agencies," the statement said.

"Throughout the training, a special emphasis is placed on morality, ethics, and proper procedure. Soldiers and officers in the unit act in accordance with their training and remain under the strict supervision of high-ranking officers."

'People are going to wish for my death', soldier says

Several Israeli soldiers who signed the letter have told the ABC they are speaking out because they believe the actions of the unit are aimed at strengthening Israel's hold over the Palestinian territories.

"What I'm doing is not helping the security of Israel in the long run," said one former first sergeant.

"It's only helping to continue the circle of violence and deepening the Israeli hold of Palestinian territories and population."

One female Sergeant said she felt compelled to join the protest.

"I feel that it's my obligation, in a sense, to do something about it – to make a stand and say, 'This is what we've been doing'," she said.

"I don't feel comfortable with it at all."

This is not the first time Israeli soldiers have refused to serve on moral grounds.

But it is the most significant such incident for more than a decade, because of the number of soldiers involved and the elite reputation of their intelligence unit.

The letter of refusal has been sent to the Israeli prime minister, the IDF chief of staff and head of military intelligence.

Most of the 43 signatories remain active reservists.

They fear they could be prosecuted and jailed for refusing a military call-up, and they are also worried about the public reaction in Israel amid heightened tension after the recent war in Gaza.

"I'm going to have to deal with the fact that people are going to wish for my death, that they're going to call me a traitor, that they're going to treat me as if I am not an Israeli that has lived here for 26 years and who has given so much of herself to this country," one woman said.

"I'm worried that Israeli society will see us as traitors, as people who are trying to harm Israel, while in reality it's the opposite. We're doing this because we feel a sense of urgency, a sense of responsibility for the place we live in," another captain said.

"The continuous cycle of violence is something that has to be stopped and something we can't be a part of."

Film about Stasi intelligence tactics inspired soldier

In a witness statement, one former member of Unit 8200 said they agreed to join the protest after watching the film The Lives of Others, which is based on East German intelligence gathering against civilians before the reunification of Germany.

"On the one hand, I felt solidarity with the victims [in the film], with the oppressed people who were denied such basic rights as I take for granted to be mine," the former soldier said.

"On the other hand, I realised that the job I had done during my military service was that of the oppressor.

"My first reaction as a discharged soldier was that we do the same things, only much more efficiently."

Other soldiers revealed that intimate conversations between innocent Palestinians were recorded and used as jokes among the Israeli soldiers.

Another mentions watching from the unit headquarters when a boy is mistakenly killed in an Israeli airstrike in Gaza.

"I remember an image on the screen of him in an orchard, and the explosion on the screen, the smoke clearing and his mother running to him, at which point we could see he was a child. The body was small," he said.

"We realised we had screwed up. I don't know of any investigation of what had happened, or if it was reviewed at a later date."

The soldiers said there was little effort to address their moral concerns while they were in full-time service.

"The goal of this unit regarding Palestinians is wrong as a whole and this is what really bothered me," one former soldier told the ABC.

"Whenever I raised doubts or questions about the morality of things we were doing, I was always told, 'Everything is OK, we are not doing anything wrong – we are simply gathering information, there is nothing wrong with it, we are not hurting anyone'.

"I knew that, of course, this isn't true."

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