Ahmad Abolfathi Mohammad also told a Kenyan court on Wednesday the Israeli agent tortured and injected him with chemicals without his consent.
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Police prosecutor Daniel Musangi denied the accusations that suspects were tortured. Magistrate Paul Biwott said the allegations were serious and ordered an investigation.
Mohammad and Sayed Mansour Mousavi were arrested last week in the coastal city of Mombasa with 15 kilograms (33 pounds) of explosives. Prosecutors contend the two intended to carry out an attack that would cause "grievous harm."
An Israeli-owned hotel was the subject of a bomb attack on the Kenyan coast in 2002.
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