Israel Trades Six Egyptian Prisoners for an Alleged Spy

Egypt released an Israeli man convicted of spying and Israel freed six Egyptian students Sunday in a prisoner swap viewed as a sign of warming relations between the two neighbors.

Azzam Azzam, an Israeli Arab, crossed into Israel from Taba in the Sinai Peninsula after his release by Egyptian authorities. Azzam was sentenced to 15 years in prison after Egypt convicted him in 1997 of spying, a charge Israel denied for eight years as it sought his release.

In exchange, Israel released six Egyptian students who had sneaked across the border four months ago and were suspected of plotting attacks against Israeli soldiers. Israeli Prime Minister Ariel Sharon also promised to consider freeing Palestinian prisoners not involved in violent attacks against Israelis.

The prisoner swap, kept under wraps until Sunday, is the latest in a series of actions that suggest at least a temporary warming between Israel and Egypt, whose relations have been peaceful but strained since they signed their landmark treaty 25 years ago. Egypt recalled its ambassador from Israel after the outbreak of the intifada in 2000.

But a shifting political landscape, including Israel’s plan to withdraw settlers and soldiers from the Gaza Strip next year and the death of Palestinian Authority President Yasser Arafat last month, is pushing the two governments to work more closely, analysts said.

Egypt would like a bigger role as a regional peacemaker and is eager for the expanded commerce that closer ties with Israel can bring. Israel hopes Egypt can nurture a moderate Palestinian leadership and help keep order in Gaza after its exit.

Bahgat Korany, director of the Middle Eastern Studies Program at the American University in Cairo, said the swap “will help create a positive atmosphere in general, and will help solidify Egypt’s stand as peace broker between Israel and the other Arab countries.”

Israel and Egypt have agreed that Egypt will deploy 750 troops along its border with Gaza to prevent weapons smuggling and begin training Palestinian security forces. Egypt also has mediated efforts to get Palestinian militant groups to agree to a cease-fire.

In a sign of the apparent conciliation, Egyptian President Hosni Mubarak last week offered a warm endorsement of Sharon, urging the Palestinians to work with him as their best chance to achieve peace.

Many observers were surprised at the comments from Mubarak, who has criticized Israel during the current conflict with the Palestinians and hasn’t visited Israel since attending the funeral for slain Prime Minister Yitzhak Rabin nine years ago.

Many Egyptians were upset over the students’ arrests and by the Israeli army’s fatal shooting last month of three Egyptian border police officers, an incident Israel said was accidental.

Shimon Shamir, a former Israeli ambassador to Egypt, said the prisoner swap was aimed at ushering closer cooperation as Israel prepared to evacuate all 21 Jewish settlements in Gaza and four others in the West Bank.

Egypt supports the withdrawal, but would like Israel to alter its plans to reduce Israel’s military presence along Gaza’s border with Egypt and ease the passage of people and goods in and out of the coastal enclave.

Egyptian leaders are aware Sharon faces stiff opposition from the Israeli right wing. Gaining the release of a high-profile prisoner’s could help him, Shamir said.

Israeli officials hope Egypt will return its ambassador to Tel Aviv and thus encourage several other Arab countries to restore their diplomatic presence.

But Shamir said the normalized relations Israel has long sought would probably prove elusive “as long as there is a Palestinian armed struggle and as much as Egyptian public opinion is so much against Israel.”

Israel is disappointed its relations with Egypt never evolved beyond a cold peace. Egypt was ostracized by much of the Arab world for signing a treaty with Israel, the only Arab country to do so until Jordan and Israel made peace in 1994.

Economic ties between Israel and Egypt remain limited, and tourism fell sharply after the intifada broke out. Cultural exchanges have been sporadic.

Yet the two countries plan to sign an agreement next week for the creation of special joint Israeli-Egyptian ventures that would manufacture products for export to the United States. Azzam, a businessman from Mughar in the Galilee region, was running a textile plant in Egypt when he was jailed for espionage. Azzam denied working as a spy.

“This is a new birthday for me,” Azzam said in a jubilant telephone call to his family that was broadcast on Israel Radio.

Hossam Hamalawy of The Times’ Cairo Bureau contributed to this report.