Egypt wants Israel to free 78 Egyptian prisoners in exchange for Ilan Grapel, an Israeli-American national accused of spying and held by Cairo since June.
The demand was presented during US Defense Secretary Leon Panetta's visit to Cairo, according to al-Ahram, a newspaper associated with the Egyptian government. In addition, Egypt wants Israel to release three Egyptian minors currently held at the Beersheba prison.
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The Egyptian paper reported that Cairo made other demands that are currently being examined by Jerusalem and Washington. If the conditions are accepted, Israel and Egypt are expected to launch direct talks aimed at closing the deal.
According to the report, Panetta submitted an official request to free Garpel during the Cairo visit.
On Friday, al-Ahram quoted sources in Egypt as saying that finalizing a deal to free Garpel is a "matter of time" as result of the "weak evidence against him."