EILAT, Israel – Egypt freed an Israeli Arab man convicted of spying in exchange for Israel's release of six Egyptian students Sunday, a swap that signaled a warming of relations that had been severely strained by the four-year-old Palestinian uprising.
Israel may also release Palestinian prisoners in the future, Prime Minister Ariel Sharon (search) said.
Egypt released Azzam Azzam (search), who was sentenced in 1997 to 15 years in prison after an Egyptian court convicted him of espionage. At the time, Azzam ran a textile factory in Egypt, and Israel has denied he was an agent.
The case against Azzam was based, in part, on a pair of women's undergarments soaked in invisible ink allegedly found in Azzam's suitcase. Egyptian officials accused him of giving the undergarments to an Egyptian accomplice, who used the invisible ink to pass Israel information on Egyptian factories.
Israel, in turn, released six Egyptian students who had sneaked into the country in August and were arrested on suspicion they tried to kidnap Israeli soldiers and commandeer a tank.
Azzam's imprisonment has been a key point of friction between Israel and Egypt, whose ties remain cool despite their 1979 peace treaty, and the students' arrest had angered many in Egypt. But Israel's relations with the Palestinians and with Egypt have been steadily improving since the death last month of Palestinian leader Yasser Arafat.
The transfer took place at the Taba crossing between Israel and Egypt. After Azzam crossed into Israel in a van, he was taken to a nearby airport at the Red Sea resort of Eilat. Israeli security officials who accompanied Azzam said he cried and flashed a victory sign as he emerged from the van.
Several hours later, he boarded a small military aircraft, smiling and waving before takeoff.
Asked by reporters how he was, he said: "Very good. Thank you, thank you."
Azzam,, 42, briefly spoke to his wife Amal, as well as to Sharon, from Eilat. "Azzam, I can't believe it's you," his wife told him, looking faint and emotional as the family cheered in the background.
Sharon told Azzam he had worked hard for his release and that "the entire country is united in happiness over your return home."
Upon news of Azzam's release, his family — members of the Druse religious sect, an offshoot of Islam — erupted in cheers, tears and applause at their home in the northern Israeli town of Mughar.
The party began almost immediately, well before his expected arrival Sunday evening. Female relatives passed around a giant tray of traditional Arab sweets, set up a sound system and began dancing, while the men cut down a fence and trees in the yard to build a stage where singers were to perform upon Azzam's arrival.
Some cheered and wept with relief. At least one family member pulled out a rifle and shot into the air in joy.
"This is a celebration for all of Israel," Azzam's brother Fandi said.
"This is a surprise. Only this morning we found out they were going to do this trade," said Iftan Azzam, another of the businessman's brothers.
Azzam was expected to undergo a medical check before returning home. A father of four, he was the director of a textile factory under joint Israeli-Egyptian ownership when he was arrested in November 1996. An Egyptian teacher convicted as his accomplice was jailed for life with hard labor.
Sharon said in a statement Sunday that he was considering releasing an unspecified number of Palestinian prisoners as part of the swap with Egypt. More than 7,000 Palestinians are being held by Israel.
The swap came several days after Egypt's foreign minister and intelligence chief met with Sharon in Jerusalem. Earlier this week, Egyptian President Hosni Mubarak praised Sharon, saying Palestinians should be able to strike a peace deal with the Israeli leader.
Mubarak's comments marked a significant warming of ties after an extended frosty period during more than four years of Israeli-Palestinian fighting. Shortly after the outbreak of the conflict in 2000, Egypt had withdrawn its ambassador from Israel.
However, Egypt expects to play a major role in Israel's planned withdrawal from the Gaza Strip in 2005. Last week, Egypt and Israel agreed on deploying 750 Egyptian troops on the Egyptian side of the border with Gaza and on Palestinian security officials being sent to Egypt for training.
The arrests of the six Egyptian university students — and the recent shooting deaths of three Egyptian policemen by Israelis along the border — had inflamed public sentiments in Egypt.
Israeli officials said the six crossed into Egypt after their release. A security officer in the Egyptian city of al-Arish, near the border with Israel, said forces in the area were preparing to receive them.
Another Egyptian security official said the students may face charges in Egypt for illegally crossing the border.
Ahead of the swap, Youssry Hassan Salem, the father of one of the students held in Israel, said "we are sitting beside the phone to know the time and place where they are going to be released today."
Salem said his son, Mohammed Youssri Hassan Salem, 24, engineering student at Helwan university, spoke to his family once in September and they received four letters from them since then. The other five were university students or recent graduates living in suburban Cairo.