The Ofek-7 spy satellite, launched three days ago, began transmitting images back to authorities in Israel, local daily Ha'aretz said on Thursday.
Israeli security sources were quoted as saying the satellite's operating systems are functioning as planned.
The Israel Aircraft Industries in cooperation with several leading Israeli defence industry companies produced the Ofek-7, which means "horizon" in Hebrew.
It was launched by an Israeli "Shavit" rocket at Palmahim air base in central Israel on Monday.
The spy satellite is equipped with a far more advanced camera than those on earlier Israeli satellites including the Ofek 5, which is in its fifth year of operation, and the Ofek 6, which crashed into the sea shortly after launch in September 2004.
The launch of Ofek-7 comes amid increasing tension with Iran and reports that Syria has been arming and preparing for a military confrontation with Israel.
However, defence sources said there is no connection between these crises and the satellite launch.