Australia has asked Israel to explain the mysterious death of an Australian-Israeli citizen and alleged Israeli spy in one of the country's prisons two years ago.

Bob Carr last week ordered his department of foreign affairs and trade to report on its handling of the case of the man, dubbed Prisoner X, who died in December 2010.

He initially said the department had been unaware the man had been in custody until his family asked for his body to be repatriated.

But he later discovered Australian intelligence officers had alerted officials 10 months earlier that he had been arrested on serious national security charges.

Mr Carr said Israel had been asked to contribute to the report.