Israel, Egypt swap prisoners in sign of warmer ties

Egypt sent a convicted Israeli spy home after eight years in jail and Israel released six Egyptian infiltrators on Sunday in a sign that relations strained by the Palestinian uprising were warming.

In putting the two affairs behind them, Israel and Egypt created momentum on another diplomatic front as Israel said it would look into freeing Palestinian prisoners.

Israeli television said hundreds could go free.

Such a move could strengthen the chances of moderate Palestinian leader Mahmoud Abbas, whom both Israel and the U.S. see as a potential peace partner, in his bid to replace the late Yasser Arafat as president in a Jan. 9 election.

The cases of both the Israeli and Egyptian captives had elements of the bizarre.

Azzam Azzam, an Israeli Arab textile worker, was alleged to have passed messages in women's underwear using invisible ink. Israel said the Egyptians, detained in August, had planned to hijack a tank.

Azzam embraced Israeli Prime Minister Ariel Sharon in a Tel Aviv hotel, an Israeli flag draped across his shoulders. Hours later, his hometown in northern Israel, Merar, greeted him with fireworks. Thousands of locals spent the day celebrating, some dancing with Israeli flags.

Azzam was detained in 1996 in Egypt, where he worked in an Israeli-Egyptian textile venture, and sentenced to 15 years in jail for spying for Israeli intelligence.

He and Israel denied the charges, which included allegations that he had used the invisible ink to communicate with a purported Egyptian co-conspirator.

Sharon's office called Azzam's release a "personal gesture" by Egyptian President Hosni Mubarak, reciprocated by Israel's agreement to free the infiltrators. Egypt's state news agency MENA said Azzam had been freed for health reasons.

Sharon told reporters that he had thanked Mubarak in a telephone call in which they discussed improving relations.

Israel's Deputy Prime Minister Ehud Olmert announced that the countries would sign a free trade deal on Dec. 14 that could foreshadow "far reaching changes in the Middle East."

The dual release, which scored points at home for Sharon as he battles to put together a new governing coalition, also appeared to offer something to the Palestinians.

"As a gesture to Mubarak, Sharon instructed the security authorities to examine the possibility of shortening the jail terms of Palestinian prisoners," Sharon's office said.

MENA said Israel had already agreed to free some Palestinian prisoners, and that Sharon had agreed to let several Palestinian security men go to Egypt for training, a move that could help his plan to pull soldiers and settlers out of Gaza next year.

Defense Minister Shaul Mofaz told the cabinet Israel would pursue a plan to gradually ease procedures for issuing travel permits to Palestinians, to help Palestinian leaders create a "new reality" after Arafat.

The Haaretz newspaper Web site said more Palestinians would be permitted to work in Israel and nine border crossings would be opened between Israel and the West Bank in February.

The Azzam case had cast a shadow over what Israelis call a "cold peace" with Egypt, which in 1979 became the first Arab country to sign a peace treaty with the Jewish state.

The six Egyptian students, aged between 21 and 25, had been arrested near the desert border for entering Israel illegally armed with an airgun and 14 knives.

Prosecutors said they planned to hijack a tank, kill its crew and then rob a bank to finance more attacks. But some of the students' parents said in interviews that their sons had no political views and had gone to Israel merely to find work.

Source: Agencies