Spying nation conceals bug (4)
I believe the answer is:
gnat
'bug' is the definition.
'spying nation conceals' is the wordplay.
'conceals' indicates the answer is hidden within the clue.
'GNAT' can be found hidden inside 'spying nation'.
(Other definitions for gnat that I've seen before include "Small biting flying insect" , "Any of various small biting flies" , "Tang (anag.)" , "small irritant" , "little irritation" .)