* Court stops short of confirming suicide was a Mossad spy
* Australia government says knew of case for two years
* Israelis chafe at censorship on story available over Web
* Media reports say several Australian-Israelis under spy investigation (Adds Australian government comments, quote from friend, background paragraphs 2, 6-7, 10-11, 15, 21-22)
By Dan Williams and Rob Taylor
JERUSALEM/CANBERRA, Feb 14 (Reuters) - Israel broke its official silence on Wednesday over the reported suicide in jail of an Australian immigrant recruited to its spy service Mossad, giving limited details about a closely guarded case that has raised questions in Israel and Australia.
In an apparent reversal on previous statements, Australia's foreign minister said on Thursday his ministry had known about the man's jailing in Israel as early as February 2010. On Wednesday he said Australian diplomats in Israel only knew about the detention after his death in custody later that year.
After appeals by Israeli media chafing at censorship of a story broken by the Australian Broadcasting Corporation (ABC), a district court near Tel Aviv allowed publication of six paragraphs of sanctioned text -- a de facto preliminary account by the state.
The text said an Israeli with an unspecified dual nationality had been secretly imprisoned "out of security considerations", only to be found dead in his cell two years ago in what was eventually ruled a suicide.
The district court did not confirm or deny ABC's unsourced findings that the dead man was 34-year-old Ben Zygier, an Australian who moved to Israel and may have been jailed in isolation over suspected misconduct while spying for Mossad.
Australian Foreign Minister Bob Carr told an oversight committee of Australian lawmakers that Canberra was told about Zygier's detention on Feb. 24, 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". He gave few other details.
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 all 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.
"I remember drinking with Ben one night in 2001 when he recounted his famous story of taking a bullet in the posterior," former colleague Patrick Durkin wrote in the Australian Financial Review newspaper.
The Israeli district court said the unidentified detainee had been held under the supervision "of the most senior officials of the Justice Ministry" and that his family had been informed of his arrest immediately after it took place.
After citing other legal monitoring mechanisms in the case, the district court said: "Beyond this no details can be published about the affair, for reasons of national security."
Israeli media had earlier quoted the ABC and other foreign reports about Zygier, dubbed "Prisoner X", some of which suggested he had been under investigation by Australia's security services on suspicion of using his native passport for Mossad missions in countries hostile to the Jewish state.
Australian media have reported Zygier was one of at least three Australian-Israeli dual nationals under investigation by the Australian Security Intelligence Organisation in 2010 over suspicions of spying for Israel.
In Israel, the possibility a Mossad officer had been treated so harshly drew comparisons to known cases when Israel jailed turncoat spies under blanket secrecy, sometimes lasting years.
Israeli intelligence veterans said such measures reduced the risk of enemy countries where the detainees had served learning of their true identities and then tracing their activities in order to expose other spies still under cover.
Mossad is widely reputed to have stepped up its shadow war in recent years against Iran's nuclear programme, Lebanon's Hezbollah guerrillas, suspected nuclear procurement by Syria and arms smuggling to Palestinians through Dubai, Sudan and Egypt.
Yet the official secrecy over the Zygier report, reinforced by military censors, caused an outcry in Israel, where reporters noted that their compatriots were but a mouse-click away from learning about the case from foreign media.
In a highly unusual move within hours of the ABC broadcast, Israeli editors were summoned to an emergency meeting in Prime Minister Benjamin Netanyahu's office on Tuesday and asked not to publish a story "that is very embarrassing to a certain government agency", Israel's liberal Haaretz newspaper reported.
Varghese told Australian lawmakers that the arrest of Zygier, also known as Ben Alon, had not been secret because both his family and Australian intelligence officials had been notified. Zygier, he said, also received legal representation in the ultra-secure Ayalon prison.
Australia complained to Israel in 2010 after faked Australian passports were used to stage the assassination in Dubai of a top Hamas operator and arms dealer. (Additional reporting by James Grubel in CANBERRA; Editing by Paul Tait)