Former foreign minister Stephen Smith has refused to say whether he was briefed about the detention of an Australian citizen - known as 'Prisoner X' - in one of Israel's most secretive jail cells. 

Ben Zygier, who was also known as Ben Allen or Ben Alon, is believed to have worked for Israel's spy agency Mossad before being arrested and jailed in February 2010.

He died in the jail cell in December that year, in what Israeli authorities have claimed was a suicide, although questions have been raised about how that could happen in a cell that was supposedly suicide-proof.

The Department of Foreign Affairs and Trade yesterday revealed Australian officials became aware of his detention through "intelligence channels", and is conducting an internal review into how the case was handled.

Mr Smith, who was foreign affairs minister at the time, says he does not want to comment on the case until that review has been finalised.

Asked whether he was briefed on Zygier's detention, Mr Smith told ABC News 24: "I'm not proposing to be drawn on any of the issues, including - and in some respects, in particular - on that, until we've seen the report by the Secretary of the Department of Foreign Affairs and Trade.

"That may well be part of his report. I'm proposing just to wait until he does that before I'm drawn on it."

The Prisoner X case is regarded as one of the most sensitive secrets of Israel's intelligence community, with the government going to extraordinary lengths to stifle media coverage and gag attempts by human rights organisations to expose the situation.

It is unclear exactly why Zygier was arrested, although a foreign media report has implicated him in the , where some of the killers used Australian passports.

According to a Fairfax newspaper report, security officials suspect the dual Australian-Israeli citizen may have been preparing to disclose information about the use of Australian passports to either the Australian Government or the media.

The ABC has been unable to verify the central claims in either media report.

The fraudulent use of Australian passports by suspected Mossad agents strained relations between the two countries, .

Former Australian Secret Intelligence Service (ASIS) official Warren Reed says Israel must have believed Zygier knew something potentially damaging.

"So if he divulged that information to somebody who was from a hostile intelligence service, hostile to Israel, he could damage Israel's national security in not only an immediate sense but ongoing for 10, 15, 20 years," Mr Reed told ABC News.

Australia's embassy in Tel Aviv was not made aware of Zygier's detention until after his death.

Instead, Australian officials communicated with Israel via "intelligence channels".

Asked at a Senate hearing yesterday whether that was normal practice, DFAT Secretary Peter Varghese replied: "No Senator, it's not normal practice and this is not a normal case".