He explained that he had joined Mossad to help his country and that he personally had never carried out acts which went against his conscience.
The man was brought into the federal court in Lausanne by a back door to avoid photographers, and testified with his Swiss lawyers and Israeli embassy representatives at his side.
He refused to give his real name, telling the court through an interpreter: "It would affect my own personal security if I gave my true identity."
Known under a cover name, Isaac Bental, he admitted to the main charges against him - of installing an illegal listening device and carrying false identity papers.
He explained that he had joined Mossad to help his country and that he personally had never carried out acts which went against his conscience.
In a concession to Israeli sensitivities, the presiding judge did not insist that he should divulge his true identity.
Mr Bental's lawyers presented documents from the Israeli Government saying that he would never return to Switzerland on duty for Mossad.
Although other Mossad agents and alleged Mossad agents have been charged with spying abroad, it is believed to be the first time a confirmed member of the Israeli agency has gone on trial outside Israel.
The hearing is expected to last another four days.
Caught red-handed
Mr Bental was caught red-handed with four other Mossad agents trying to install a telephone bug in an apartment block in the Swiss capital, Berne, in February, 1998.
He was released on $2m bail after spending two months in a Swiss prison.
Right up to the day of the trial, it remained unclear whether Israel would return him to Switzerland to face the charges.
Mr Bental maintains that the owner of the apartment, a Swiss of Lebanese origin, was a suspected member of the Islamic organisation, Hezbollah.
He said his mission had been to save the lives of those targeted and prevent terrorist attacks.
Israel embarrassed
However, the bungled operation - one of a series involving Mossad agents - caused deep embarrassment in Israel and the head of the secret service resigned.
It also strained bilateral relations already overshadowed by tensions over Switzerland's treatment of the assets of Jews who perished in the Holocaust.
Switzerland demanded and received an apology from Israel, but its police also blundered.
They released the four other agents, not realising the significance of the affair.
A sixth man, believed to be the leader of the operation, was never caught.