The Foreign Ministry paid the Spanish owner of a pornographic website $3,000 to relinquish the Twitter username @Israel.
The ministry on Tuesday denied media report that it had paid the previous account holder, Israel Melendez, six figures to purchase the username.
The Spanish newspaper Publico quoted Melendez as saying he had received a sum that included "five zeroes" in the transaction.
The Foreign Ministry's Director of the Information and Internet, Chaim Shacham, told Haaretz that that the reports were blown out of proportion.
The ministry paid Melendez a total of $3,000 to relinquish the name, said Shacham, adding that the arrangement was made completely within the guidelines of Twitter's terms of service.
"We coordinated with the twitter account holder that he would change the name of his account and we coordinated the time that the name would change so that when the name became available we could pick it up," said Shacham, who orchestrated the arrangement.
"So he retained his account and we retained ours," added Shacham. "There was no transaction, but he changed his name at a time when we change ours to the username he just relinquished."
Through the arrangement, both parties appear to have rid themselves of unwanted web traffic: Melendez told the New York Times that the account with the micro-blogging site was lying dormant after he discovered that every post unleashed a torrent of anti-Israel and anti-Semitic comments.
"My account was basically unused because I was getting dozens of replies every day from people who thought the account belonged to the state of Israel," said Meléndez, who lives in Miami.
According to MSNBC, Melendez told Publico that he already had a handle with his last name - but was looking to shake off an ex-girlfriend by using a different username.