His 1986 account in London's "Sunday Times" led independent analysts to conclude that Israel had a stockpile of nuclear weapons. It also led to the imprisonment of his source for treason. Nuclear expert-turned-whistleblower Mordechai Vanunu was released on 21 April after 18 years in prison.
Now, however, Hounam is the one sitting in an Israeli jail.
The freelance British journalist had returned to Israel in April to cover Vanunu's release as part of a documentary for the BBC. But last night Hounam was seized by agents of Israel's Shin Beit internal security service.
Donatella Rovera of the British-based human rights group Amnesty International witnessed the arrest in the lobby of Hounam's East Jerusalem hotel.
"When Peter Hounam was brought in at about 9:30 [in the evening] by a group of plainclothes men, he broke away from them near the entrance and I was just sitting at the nearest table to the entrance," Rovera said. "So he came over looking very concerned and just asked to myself and my colleagues to make sure that the 'Sunday Times' and his family knew that he was being arrested. He was then taken upstairs and after about half an hour he was brought down with his bags. There was a police car outside and two plain cars and he was taken away."
Why Hounam was arrested remains unclear.
An Israeli judge has issued a gag order on his seizure. But the website of the "Yedioth Ahronoth" newspaper said Hounam was being questioned on suspicion of committing "security offenses."
Reportedly, Hounam had recently met with Vanunu in a Jerusalem church despite government restrictions banning the former nuclear technician from meeting with foreigners or members of the media.
Hounam's lawyer, Avigdor Feldman, was granted access to his client today after being temporarily barred from meeting with Hounam.
In an interview with RFE/RL, Feldman called the arrest a farce and attributed it to Israel's "security obsession" with Vanunu.
"I think this was a very stupid act,” Feldman said. “This was done without real consideration of the impact of such a step on the image of Israel in foreign media and foreign states, while the image of Israel, as it is, is not very brilliant now."
Citing unidentified sources, the "Jerusalem Post" newspaper reported that Hounam might have been trying to bypass military censors and smuggle videotapes of an interview with Vanunu conducted through a proxy shortly after Vanunu's release.
Israeli defense officials are reportedly convinced that despite his denials, Vanunu still has state secrets to reveal. According to Israeli media, material was found in Vanunu's cell that shows highly detailed diagrams and floor plans of the Dimona nuclear reactor, where Vanunu once worked.
Israel maintains a policy of so-called "strategic ambiguity" regarding its nuclear arsenal. But the Jewish state is widely believed to possess several hundred atomic weapons as a defensive deterrent to what it sees as largely hostile Arab neighbors.
Still, the topic of nuclear weapons is highly taboo in Israel, according to analyst Yossi Mekelberg of London's Royal Institute of International Affairs.
"There is some fear within the Israeli security community that Vanunu either can say [something] that hasn't so far been revealed, or they are trying to deter other people from talking about either the nuclear issue or issues of security in general," Mekelberg said.
Mekelberg said that there is growing international attention on the issue of nuclear arms proliferation, particularly in the Middle East, where Iran is suspected of harboring a secret atomic program.
Given the growing international spotlight on weapons of mass destruction -- the basis for the U.S. war in Iraq -- Mekelberg said the issue of Israel's nuclear weapons is likely to come under greater scrutiny in the future.
"Ambiguity works in Israel's favor -- that's the way it's seen in Israel. And in this sense, there is no reason for Israel to change it. But there will come a point -- probably in the future, as part of comprehensive peace negotiations and peace agreement -- when Israel will probably have to address, and the Middle East in general will have to address, the issue of weapons of mass destruction," Mekelberg said.