Secret agents disguised as Arabs – known in Hebrew as “mista’aravim” – were used before Israel’s founding. Jews, usually recruited from Arab countries, went undercover in neighbouring states to collect intelligence.
The Haaretz newspaper revealed in 1998 that the secret police, the Shin Bet, also operated a number of mista’aravim inside Israel shortly after the state’s creation, locating them in major Arab communities.
The unit was disbanded in 1959, amid great secrecy, after several agents married local Arab women, and in some cases had children with them, in order to maintain their cover.
But the mista’aravim are better known for their use by the Israeli army on short-term missions inside Arab countries or in the West Bank and Gaza, where they have often been sent to capture or kill local leaders.
Does the above, or the article from which it came prove such an idea, but it does underscore the fact that Israelis do in fact have agents in Palestine.