The history of spying is in many ways a history of broken allegiances, of long-distance betrayals that lead to murder, of fractured families, of fakers, of individuals caught up in unbelievably difficult circumstances with no way out. Many spying successes are based on discovering traitors elsewhere. Rarely does a significant secret get stolen without someone, eventually, dying because of it, or from it. Argos are few and far between. If you find a story like that, buy the rights to it, and sell it, and Hollywood will turn it into a movie.
The story of "Prisoner X" ought to be placed in this context. It's fascinating and horrible. A young Australian named Ben Zygier became a spy for Israeli's Mossad. The Australian intelligence service found out and doubled him, getting him to report on what the Mossad was trying to get from Australia. Then the Mossad found out that their officer had been doubled. They arrested him and imprisoned him. He allegedly committed suicide in a secret Israeli jail. Formal censorship in Israel and informal censorship in Australia kept the story from coming out before now.
The account I find most reliable, by a former Mossad case officer named Michael Ross, suggests that Zygier was caught when Australia began to monitor passport use by Australian Jews who traveled frequently. Passports and identity documents are the coin of the realm for intelligence services, and Mossad has a history of stealing them from Australia and New Zealand and Great Britain.
I would wager that to the extent that Israel spies on the United States, its operatives are now primarily engaged in economic espionage and in borrowing unsuspecting Americans' identities for a while in order to facilitate Mossad cover stories elsewhere. Ross has no direct knowledge of Zygier's case, but he knows how allied intelligence agencies tend to react to these indiscretions. They cover it up.
Zygier was a man between two countries, as Ross writes, which both viewed him as a traitor.
Australia's government is now under pressure to ask Israel to formally investigate the death; the insinuation is that he was somehow killed by Israel to prevent him from talking. That's highly unlikely. But the press in both countries are forcing the intelligence services to talk about an uncomfortable subject, and if the result is a better way of handling these sorts of delicate thing in the future, then it's all to the good. Friendly countries might read each other's mail, but they ought to have a way of ensuring that those caught up in their geopolitical games are treated fairly.