Israel doesn't give a shit; they've owned up all sorts of US infrastructure, and even (famously) had double agents planted in the US.

I feel like this quote from Yuval Steinitz just has to be a tongue-in-cheek acknowledgment of that. Or it's just the most bald-faced lie I've heard in ages - not sure which interpretation is more funny.

“We know that the Americans spy on the whole world, and also on us, also on their friends. But still, it is disappointing, inter alia because, going back decades already, we have not spied nor collected intelligence nor hacked encryptions in the United States.”

Well, I met a probable Israeli spy in-artfully posing as an art-student in Colorado when I was 19 working at an ISP that had purchased some wireless tech from an Israeli firm.

I suspect it is fully-in-cheek.

How did you know he was a spy? Did he act sneaky?

And actively lobby for their early release from prison.

That's kind of expected.

My point was that even though they are allies there are normal & public interactions around spying. So yes, very much expected. The unexpected thing is people assuming allies don't spy on each other.

By whom?

Not lobbying for the release of your own spies would be very much out of the ordinary.