Ouda was arrested by the Palestinian General Intelligence Service on suspicion of belonging to a Hamas armed organization, and was questioned for several days.
A source in the Palestinian intelligence said that Ouda told his investigators that he had been a Hamas activist since 2001 and was recruited by the Israeli Shin Bet organization in 2003.
According to the young man, he had been involved in a series of surveillances, arrests and assassinations of Palestinians, including five wanted men who were killed in 2005 in the village of Tamon near Jenin.
Palestinian General Intelligence Chief Tawfik Tirawi decided to spread a rumor that Ouda's medical condition had deteriorated as a result of torture and that he was transferred to an Israeli hospital, where doctors declared that he was in a state of clinical death.
Hamas officials responded to the rumor by claiming that the incident proved the Palestinian Authority was fighting and killing the "Mujahideen" (Muslims fighting in a war or involved in any other struggle) and that it was an anti-Islamic authority.
Former Palestinian Prime Minister Ismail Haniyeh addressed the incident in a fiery sermon he delivered on Friday in Gaza. Haniyeh said that the PA was killing the fighters and the Islamic Mujahideen at its prisons.
"The last victim of the anti-Islamic authority's policy is one of Islam's young men in the West Bank, Mu'aied Bani Ouda, who was tortured to death during his interrogation by the PA," Haniyeh called out.
Ouda also said that he had not been tortured and that he was alive and well.
Hamas did not respond to Ouda's television appearance, but the organization's media outlets quoted Ouda's family members as saying that the General Intelligence Service's claims that he was a collaborator were false and that he was badly tortured during his interrogation.