Defense and Foreign Affairs Committee Chairman Yuval Steinitz told Army Radio that Lawrence Franklin was never "activated" as an intelligence source, despite Franklin's testimony Wednesday in Washington.
Franklin, 58, pleaded guilty to passing classified information to pro-Israel lobbyists, and said he had also given information to an Israeli diplomat, but played down its importance, the BBC said.
Steinitz said despite Franklin's admissions, Israel had no active role in acquiring information.
Israel is not spying in the United States or against the United States," Steinitz said, adding Franklin's testimony "doesn't accuse Israel of activating Franklin or tempting him."
Franklin also pleaded guilty to the third charge of holding classified defense documents at his home in West Virginia without being authorized to do so, the Jerusalem Post reported. He is to be sentenced Jan. 20.