Prominent Israeli lawyer Gaby Lasky, who specialises in cases of Palestinian children before Israel's military court, said as part of this intelligence gathering the Israeli army had begun "mapping" children.
This involved waking children at night, photographing them, checking their identity papers and asking which beds they sleep in.
Ms Lasky says security forces frequently begin interrogations by asking about claims of stone throwing then dig more broadly for intelligence.
The claim has come during a joint investigation between the ABC's Four Corners and The Australian newspaper, to be broadcast tonight.
When they are arrested they are being questioned about the motivations of those who sent them, about the plans of those who sent them, about the general activities of those who sent them, in order to prevent other such activities
Israel's international spokesman Yigal Palmor
The investigation has obtained pictures of Israeli soldiers mapping children.
It examines the treatment of Palestinian children in Israel's military court system which 726,000 Palestinian men, women and children have been through since Israel began occupying the Palestinian Territories in 1967.
Israel's international spokesman Yigal Palmor confirmed that there was a pattern of trying to gather information from children beyond the specific accusation but said this was "perfectly legitimate".
"There has to be a pattern because the interrogators will want to gather information about possible violence emerging from a certain area or from certain people," Mr Palmor told Four Corners.
"And I think that's perfectly legitimate to ask people who are arrested for being involved in violent actions, to ask them where they come from, why they have been involved in such violent actions, who sent them and whether there are more people coming from the same place with the same intent."
But he said rather than being used to gather intelligence, children had been used by Palestinian militants or terrorists in order to carry out violent attacks.
"And when they are arrested they are being questioned about the motivations of those who sent them, about the plans of those who sent them, about the general activities of those who sent them, in order to prevent other such activities, in order to prevent more minors being involved in violence," he said.
Claims Israel tried to recruit Palestinian children as informants
Ms Lasky said children were being used to incriminate leaders of the non-violent opposition movement in the West Bank because they were "the weakest link".
Asked if the Israeli security services were using children to gather intelligence, Ms Lasky replied: "100 per cent so."
Ms Lasky's assertion has been backed by the director of the YMCA near Bethlehem, Nader Abu Amsha, who deals with many of the 700 Palestinian children detained each year by the Israeli army.
He said children were being used to gather intelligence and that this was "breaking children forever".
Or sometimes there are offers of money, generally not a great deal of money, but the child can be offered money, mobile phone, threatened sometimes, if the child will not, in order to get that child to provide information in the future.
Australian barrister Gerard Horton
Ms Lasky's claim has also been supported by Australian barrister Gerard Horton who has formed Military Court Watch.
Mr Horton, who has taken hundreds of affidavits from Palestinian children, said in some cases attempts were made to recruit children to be informants.
He said in some interrogations the security services tried not only to find out who might be throwing stones in the village – the reason given for the child's arrest – but made it clear to the children that they could be released immediately "if you just from time to time provide us with a little bit of information about who the troublemakers in the village are".
"Or sometimes there are offers of money, generally not a great deal of money, but the child can be offered money, mobile phone, threatened sometimes, if the child will not, in order to get that child to provide information in the future."
Palestinian children being damaged by questioning: YMCA
The YMCA's Nader Abu Amsha said questioning children about their communities was causing psychological damage to children.
"They (Israeli security services) are trying to know information about the village and about the life of people, the families, the attitudes of the community," he said.
So this kind of converting a child who's not responsible for his act to be a collaborator is not just helping in information gathering for the Israelis it's breaking this child forever.
YMCA director Nader Abu Amsha
Mr Amsha said: "The most vicious and the most horrible thing (is) to push people to collaborate as collaborators with occupiers, to put them under the stick and carrot process.
"If you reject this, if you are (to) refuse this, you will be punished, you will stay longer in prison and if you accept being a collaborator... you will receive some kind of rewards and you will be dealt with differently and you will be happy.
"So this kind of converting a child who's not responsible for his act to be a collaborator is not just helping in information gathering for the Israelis it's breaking this child forever."
John Lyons' Four Corners report, Stone Cold Justice, will be broadcast tonight at 8:30pm on ABC1.