TEL AVIV — Israelis mostly shrugged in July when The Washington Post and 16 media partners revealed that spyware supplied by Israel’s NSO Group had been used by governments to hack the cellphones of journalists, diplomats and activists around the world.

But after a report last week by a local newspaper that Israeli police have been using the same Pegasus surveillance technology without warrants to target Israeli political activists, mayors and other citizens, NSO has suddenly come under scrutiny at home by the public and media.

Israeli Attorney General Avichai Mandelblit said last week that he will launch an investigation into the issue. If the allegations published by the Israeli financial newspaper Calcalist are true, he said, “it is difficult to overstate the severity of the alleged harm to basic rights.”

Tehilla Shwartz Altshuler, a senior fellow at the Israel Democracy Institute, said that “it was the earthquake we’ve been waiting for.” She has led a group of experts pushing for legislation to regulate surveillance technology.

“It seems that Israelis didn’t really care that these technologies are being used in dictatorships in Africa, or in semi-dictatorships, like Mexico or Hungary, and they didn’t care when it became known that NSO is being used against Palestinians in the Palestinian territories,” she said. “But no one should ever assume that something will be used in Ramallah and not in Tel Aviv.”

Calcalist said last week that one of the targets of the Pegasus software was an organizer of protests against then-Prime Minister Benjamin Netanyahu. The target, dubbed “swordtail,” was surveilled without his knowledge, found to be active on the gay dating app Grindr and followed as he went on dates - information that was to be leveraged in future police interrogations, according to the report.

“The last NSO story died out quickly in Israel,” said Michael Dahan, a senior lecturer specializing in cyberwarfare and politicization of data at Sapir College in southern Israel. “The police are hoping that everyone will forget about it this time, too, but it will be hard to put this cat back in the bag.”

A police officer from the unit involved in the operation said the targeted man was suspected of “aggravated public order violations” and was a “danger to democracy,” the Calcalist report said. Israeli police have said that “all police activity in this field is done in accordance with the law, on the basis of court orders and strict work procedures.”

In a statement published by Israeli media, NSO Group said, “We would like to clarify that the company does not operate the systems in its customers’ possession and is not involved in their operation. The company sells its products under license and supervision for the use of security bodies and state law enforcement agencies, to prevent crime and terrorism legally, and according to court orders and local law in each country.”

Much of current Israeli law was drafted for the phone booth era and has not been comprehensively updated since the 1980s. “Existing legislation authorizing the police to wiretap and search was enacted at a time when no one foresaw the technological power of the tools available today,” Labor Party lawmaker Gilad Kariv told the parliament last week, calling for stricter regulation.

Israelis have long taken pride in their tech industry, which has become a global leader. This success has been made possible, in large part, by the intimate, highly lucrative relationship between private sector start-ups and the military. Graduates of military intelligence units, especially the once-secretive elite Unit 8200, often join cybersecurity companies, where “unicorns,” or start-ups valued at over $1 billion, have become more common in recent years. NSO’s spokesperson is the former military spokesperson.

Since its founding in 2010, NSO has been a darling of the local media and the envy of many in Israel’s start-up ecosystem. But NSO has drawn controversy in recent years for its involvement in helping authoritarian governments track political activists.

NSO was blacklisted by the U.S. government in November, and since then, Israel’s defense ministry has barred cyber companies from exporting to all but 37 countries, down from 102, Calcalist reported.

On Tuesday, NSO Group chairman Asher Levy announced he would resign from the company. “There is no connection between the termination of my position and recent publications linked to NSO,” Levy said in a statement.

A Tel Aviv court on Monday appointed a trustee for NSO after three of its subsidiaries petitioned for intervention, saying chief executive Shalev Hulio was refusing to pay employees as a way to help cover hundreds of millions of dollars in debt, according to a report in Calcalist.