By Dan Williams

JERUSALEM (Reuters) - Israel's deputy ambassador to the United States was dismissed after admitting a serious security breach that required "blood, sweat and tears" to repair, Foreign Minister Avigdor Lieberman said on Thursday.

The removal on Tuesday of veteran diplomat Dan Arbell over a media leak prompted Israeli commentators to accuse the far-right Lieberman of a witch-hunt.

Interviewed on Israel Radio, Lieberman gave no details on Arbell's case, citing a government censorship order.

But he said the envoy had "confessed and taken responsibility" under interrogation by the Shin Bet security service, and was now being handled by the Justice Ministry.

"There is a difference between the public's right to know and the dereliction of security," Lieberman said.

"Here was a serious blow to national security, which repairing and restoring afterward required a great effort and a lot of blood, sweat and tears on our part."

A diplomatic source said Arbell's alleged leak was in early 2009. President Barack Obama and Israeli Prime Minister Benjamin Netanyahu took office in January and March that year, and while they have agreed on the need to curb Iran, ties have frayed over Israel's stalled peacemaking with the Palestinians.

Another suspect in the case, Alon Bar, served at the time as Foreign Ministry deputy director for strategic affairs, a role devoted largely to monitoring Iran's nuclear program. Bar was suspended, investigated, cleared and made ambassador to Spain.

Israel's biggest-selling newspaper, Yedioth Ahronoth, quoted Arbell as saying his misconduct had been overblown.

"I made a mistake and took responsibility, but I had no bad intention. I don't deserve such an excessive punishment after a 25-year career," Arbell was quoted as saying by the daily.

Lieberman, the most powerful partner in Netanyahu's conservative coalition government, has often clashed with the prime minister on policy and is largely sidelined in Israeli contacts with key Western countries.

Some Israeli diplomats rankle at the foreign minister's blunt rhetoric, and a long-running police investigation into Lieberman's finances, which prosecutors say could lead to a trial, has helped draw public scrutiny of his behavior.

The Moldovan-born Lieberman denies wrongdoing and has in the past described himself as the victim of media prejudice.

Asked about Israeli journalists who have argued that Arbell had merely confirmed information obtained elsewhere by the reporter he spoke to, Lieberman described that account as false.

"Some of them are apparently liars and idiots, or this is something that I regard as more serious -- payback for someone who, it seems, excelled over the years in leaking and leaking and leaking," Lieberman said. "And today it's payback time."

(Writing by Dan Williams; Editing by Alistair Lyon)