Tel Aviv -  Israel has confirmed it jailed an Australian-Israeli citizen, known as "Prisoner X", in solitary confinement on security grounds who later died in custody.

The justice ministry broke its silence on Wednesday after Australia's ABC news network first revealed the identity of the 34-year-old man who had used three different names, including Ben Zygier, Ben Allen, and Ben Alon. "For security reasons the man was held under a false identity although his family was immediately informed of his arrest," the ministry said.

The man, a suspected Mossad agent, was found dead in his cell and a judicial inquiry ruled he took his own life, the ministry added in a statement, although it did not reveal his identity or the charges against him.

"Following an extensive investigation it was ruled six weeks ago that it was suicide," said the ministry.

"The prisoner was held in jail under a warrant issued by a court."

After appeals by Israeli media chafing at censorship of a story broken by ABC, a district court near Tel Aviv allowed publication of six paragraphs of sanctioned text - a de facto preliminary account by the state.

The district court did not confirm or deny ABC's unsourced findings that the dead man was Zygier.

After initially denying that he knew nothing about the case, Australia's Foreign Minister Bob Carr said on Thursday that his government did know that an Australian was detained by Israel in February 2010 for national security offences.

On Wednesday, he said Australian diplomats in Israel only knew about Zygier's detention after his death in custody later that year.

Carr told an oversight committee of Australian legislators that Canberra was told about Zygier's detention on 24 February 2010, just after his arrest over "serious offences under Israeli national security legislation".

Foreign ministry secretary Peter Varghese said the information was not given to Australian diplomats but "came in another form, from another channel".

Social media records showed that Zygier, who came from a prominent Jewish family in Australia and was buried in Melbourne, had been married with children. His relatives have declined to comment on the case.

Former friends in Australia said Zygier had been a lawyer and used to recount stories of his time in the Israeli military.