Court documents cited by Haaretz newspaper said the prisoner was being held in another wing of Ayalon prison at the same time as Ben Zygier, an alleged Mossad spy whose mysterious arrest and subsequent suicide shocked Israel and Australia when it hit the headlines in February.
The documents show the second prisoner had already been convicted without saying what his crime was.
The prisoner, who was being held under similar conditions to Zygier, was not named and it was not clear from the papers whether he was still incarcerated, Haaretz said.
Haaretz said the second prisoner was being held in Block 13 and that like Zygier, his case was being handled by the Shin Bet internal security service and the prison's intelligence officers.
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The paper said the information was included in an appendix to a transcript of hearings and decisions on the Zygier case, which was released by the Central District Magistrates Court following a Haaretz request.
"They are Israeli, they work in institutions linked to security whose activities are shrouded in secrecy," he said.
"And their detention demonstrates the failure of these organisations which are not capable of preventing offences such as those for which these agents have been arrested," he said.
Two months ago, the Australian Broadcasting Corporation, which broke the original story about 'Prisoner X' in February, said that Zygier had been arrested after unwittingly sabotaging a top-secret spy operation to bring home the bodies of Israeli soldiers missing in Lebanon.