Friends and relatives of a U.S.-born Israeli arrested in Egypt on spy charges said Monday he is a law student in Atlanta with an avid interest in the Mideast -- and not a Mossad agent out to sabotage Egypt's revolution, as Egyptian authorities claim.

His mother and a fellow student said he arrived in Cairo only in May. Late Monday, the official Egyptian News Agency said the investigation showed he arrived in Egypt just before the protests began on Jan. 25 and was in the square where the protests were centered every day, "inciting sedition, spreading rumors, and urging (protesters toward friction with the armed forces and to commit acts of violence."

The arrest of 27-year-old Ilan Grapel has set off new fears in Israel that relations with Egypt will sour now that its longtime president, Hosni Mubarak, has been deposed.

Since Mubarak's ouster, Egypt's military rulers have often warned against unspecified "foreign" attempts to destabilize the country. Egypt, like other Arab states, has a long history of blaming internal problems on Israeli saboteurs.

"I hope this doesn't mark a new direction of putting peace in deep freeze and beginning harassment," said Israeli lawmaker Binyamin Ben-Eliezer, who counts Mubarak as a personal friend. Israel and Egypt signed a peace treaty in 1979, but relations have been cordial at best.

Grapel, 27, was arrested Sunday at a hotel in Cairo. His mother, Irene Grapel, said he was spending the summer as an intern at a legal aid group. A statement from the Egyptian prosecution said Grapel had recently attended protests and "incited the protesters to acts of riot."

Pictures of Grapel were published in Egyptian newspapers, and the semiofficial Egyptian daily Al-Ahram identified him in a headline as a "Mossad officer who tried to sabotage the Egyptian revolution."

Grapel's mother, Irene Grapel, told Israel Army Radio in an interview from Queens, N.Y., that the family had spoken to him on Monday and that "he is not being mistreated." She said her son arrived in Cairo in May to do a legal internship with a group that helps resettle refugees.

In an interview with AP Television News, she called the changes "so bogus. He is not a Mossad spy."

The spokeswoman for the U.S. Embassy in Cairo, Elizabeth Colton, said a consular officer visited Grapel in custody. Diplomats were working to make sure he is "treated fairly under local law" and maintains communication with family and friends in the U.S., she said in an email.

An Israeli official said Grapel's case was being handled by the U.S. and not Israel because he entered Egypt with an American passport. Egypt receives large amounts of foreign aid from the U.S.

Law school colleagues cast doubts on the allegations, and an Egyptian Facebook page, sardonically called "stupid Israeli spy," even mocked the charges, saying no spy could have bumbled so badly.

Grapel appears to have been traveling under his real name, made no secret of his Israeli links. His connections to Israel, including his past military service, are easy to find on the Internet.

"I don't think a Mossad agent would post things on Facebook, travel under his own name and get a grant from law school to travel," said Rebecca Peskin, a classmate at Emory University in Atlanta, dismissing the Egyptian allegations. "This is a big misunderstanding."

Will Felder, another Emory classmate, described Grapel as a classmate who was born in New York City, then moved to Israel, where his grandparents live, as a young man.

Felder denied the Egyptian claim that Grapel was in Egypt between January and May. "He was regularly in classes," he told the AP by email. "The only length of time we were not in school together would have been spring break, and he was in (New York) with his family."

Like most Israeli citizens, he performed compulsory military service. He was wounded in the 2006 war between the Israeli military and Lebanese Hezbollah guerrillas. Israeli news websites on Monday published what they identified as wartime pictures of Grapel lying in his hospital bed. Grapel later returned to the U.S. for law school.

Grapel graduated from Johns Hopkins University in Baltimore, Maryland, in 2005 with a bachelor's degree in international studies, school officials said. He planned to return to Emory for his third and final year of law studies, Felder said.

He described Grapel as "very liberal, very open-minded" and "pro-conciliation." He said he was not affiliated with any political groups.

Yigal Palmor, a spokesman for Israel's Foreign Ministry, said Egyptian authorities have not officially informed Israel about the arrest. In other cases, official notification has lagged behind newspaper reports, he said.

This was the first case of arrest of an alleged Israeli agent since the fall of Mubarak. In 2004, Egypt freed Israeli Arab businessman Azzam Azzam, who spent eight years in an Egyptian prison after being convicted of industrial espionage. Azzam and the Israeli government always insisted he was innocent.