OCCUPIED JERUSALEM: Israel and Egypt have reached a deal to swap 25 Egyptian prisoners in Israeli custody for U.S.-Israeli dual national Ilan Grapel, held by Egypt since June, a statement from Prime Minister Benjamin Netanyahu’s office said Monday.

The U.S.-brokered deal was reached days after a successful Egyptian-brokered swap between Israel and Hamas Islamists that freed captive soldier Gilad Shalit in exchange for more than 1,000 Palestinian prisoners.

It was subject to Israeli Security Cabinet approval widely expected to be issued at a session scheduled Tuesday, the Israeli statement said.

Egyptian officials confirmed the agreement and a source in Cairo said the swap may take place this week. An Israeli official involved in the talks told Reuters the swap was expected to occur Thursday once Israeli ministers give the go-ahead.

“In the framework of efforts by Israel and Egypt and with the help of the United States, Egypt has agreed to release Ilan Grapel. By Egyptian request Israel has agreed to free 25 Egyptian prisoners,” the official said.

Grapel, 27, was arrested in Egypt and accused of being a spy out to recruit agents and monitor events in the revolt that overthrew President Hosni Mubarak in February, an ally of both the United States and Israel.

Israeli Foreign Minister Avigdor Lieberman told reporters earlier Monday he hoped Grapel “will be freed as soon as possible” and strongly denied he had been involved in any espionage.

Grapel’s mother said at the time of his arrest that her son, a law student in the United States, was working for Saint Andrew’s Refugee Services, a non-governmental organization, in Cairo.

Grapel emigrated to Israel in 2005 from New York and served in its military during a 2006 war with Hezbollah in Lebanon.

The deal for Grapel may ease strains in Israeli-Egyptian ties since summer when five Egyptian security personnel were killed during a cross-border shooting at the Israeli frontier in August, an incident in which eight Israelis were also killed by gunmen who ambushed a road.

Israel apologized to Egypt for the shootings earlier this month as Cairo had insisted, citing a joint investigation which showed Egyptian police had died “as a result of gunfire by our [Israeli] forces.” Egypt was the first of two Arab countries to sign a peace agreement with Israel in 1979.