Alon Ben-David, senior defence correspondent with News Ten in Israel and senior fellow at the Centre for International Communications at Bar-Ilan University, also said he had no doubt that Australian-Israeli Ben Zygier was a Mossad agent.
Last week, the ABC's Foreign Correspondent program revealed Zygier was found hanged in a secret prison cell near Tel Aviv in 2010.
The Australian-Israeli citizen was thought to be an agent for Israel's Mossad spy agency, and Israel went to extreme lengths to cover up the death.
It imposed a total media blackout on the case but was forced to ease the restrictions after the story made headlines across the world, rendering the local gag order ineffective.
"I can't even begin to describe the amount of damage that this affair has caused," Mr Ben-David said.
"Every time the picture and the name of a Mossad agent appears in the paper, it is hard to explain but just imagine what's going on in the countries around us since the ABC aired this story initially.
"Iran, Lebanon, Syria - they all check to see when this person visited them, who was he with, who did he meet inside the country, what cell phone he used, can they trace back the calls, can they reconstruct text messages?
"Circles and circles of damage that can't even describe."
Last week, Israel confirmed having held an Israeli-Australian citizen in solitary confinement under a false name.
When asked what he thought Zygier must have done to be locked up in Israel's highest security cell, Mr Ben-David said: "I think Zygier divulged very sensitive information to a foreign element.
"They say he spoke to a journalist and he spoke about the people he worked with and how they work and methods of work and all kinds of operations that are being conducted.
"It is quite clear I think for the Israeli agencies that Zygier was not acting out of malice.
"There was no motive of greed, no ideology. I don't know if he was trying just to boast but he did something very serious and when he was jailed they weren't sure how to treat him.
"It was clear that he is not a criminal but still he did something very wrong. That's why they negotiated a plea bargain with him.
"He was charged with divulging information, critical information to a foreign element that was not supposed to be exposed to that kind of information."
The inquest into Zygier's death returned a verdict of suicide, committed in what was meant to be a suicide-proof cell, though findings released in a government report also referred to abrasions to his arm and traces of sedative in his system.
While questions have arisen following the release of these details, Mr Ben-David insists Zygier took his own life.
"No, not at all," he said when asked if he doubted the verdict.
"First of all, you know, in Israel we don't kill other Israelis even if they are charged with serious crime, so clearly they were trying to protect him, they were trying to look after him but unfortunately he managed to do that."
"It is not completely out there," he said. "I mean, as I said, parts of it are coming out now but many parts haven't come out yet.
"I am bound by the Israeli law in what I can say and what I cannot say about the matter."