Foreign Minister Bob Carr has ordered a review of his department's handling of the mysterious case of Melbourne man Ben Zygier after it emerged Australian diplomats did know about his imprisonment in Israel.
Senator Carr says he was acting on Department of Foreign Affairs and Trade advice when he told the ABC's Foreign Correspondent program this week that the government knew nothing of Mr Zygier's detention until after his death in 2010.
But Senator Carr says DFAT told him on Wednesday that some officials were aware of it much earlier.
"The department has today come back and said some officers of the department were in fact aware of his detention," a spokesman for Senator Carr told AAP.
Senator Carr subsequently ordered DFAT Secretary Peter Varghese to review the case.
"That's not to suggest anything untoward has happened, but given that there's an interest in the case, let's have the review," the spokesman said.
Mr Zygier, also known as Ben Alon, died apparently by his own hand in a high-security cell at Ayalon Prison near Tel Aviv in December 2010, Foreign Correspondent revealed.
While the circumstances surrounding Mr Zygier's detention are shrouded in mystery, the Foreign Correspondent report suggested he worked for Israeli spy agency Mossad.
Local and international media have speculated he was the so-called Prisoner X, one of the Israeli security community's most sensitive national-security secrets.
The story of Prisoner X first emerged in May 2010 when Israel's Ynet news website ran a story titled "Who are you, Mr X?", in which it spoke about a prisoner being held in top-secret conditions whose identity and crime were not even known to his jailers.
But the story was quickly taken offline due to a gag order.
The ABC report said Mr Zygier moved from Melbourne to Israel in 2000, married an Israeli woman and fathered two children.
Seven days after he died at age 34 his body was flown to Melbourne where he was buried in a Jewish cemetery.
Two Israeli MPs questioned the justice minister over the ABC report in the Knesset, or parliament, on Wednesday.
"This prisoner was detained under a name which was not his own. Do you know about this?" Arab Israeli MP Ahmed Tibi asked during an open question session.
"Can you confirm that this Australian committed suicide in prison under a false name so it wouldn't be revealed he was being detained in Israel?" he asked outgoing Justice Minister Yaakov Neeman.
"But there is no doubt that if true, the matter must be looked into," he added.
Australian Greens leader Christine Milne said Senator Carr should press Israel about the circumstances of the case.
Comment has been sought from the Israeli embassy in Canberra.
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