Alleged spy Ilan Grapel may be exchanged for all 81 Egyptians held in Israel's prisons as early as Tuedsay, Army radio reported on Monday.
Egyptian security officials say the exchange could happen as early as Teusday at the Taba border crossing on the Israel-Egypt border.
"I can only hope that, just as we released Gilad Shalit from his captivity, we will release all the rest," Yitzhak Levanon, Israel's ambassador to Egypt, told Army Radio.
Grapel, a dual American-Israeli citizen from New York, was arrested by Egyptian security officials for sundry espionage charges they say occurred during the popular revolution against the regime of long-time president Hosni Mubarak early this year.
Grapel, a law student at Emory University in Atlanta, is said by friends, family, and Israeli officials to have been in Egypt to "experience the revolution," and to intern with an NGO that aids African refugees.
In June US Rep. Gary Ackerman, for whom Grapel interned in 2002, described him as "very liberal," and someone who "wants to help people in Egypt."
However, Egyptian authorities claim Grapel, who served as an IDF paratrooper during the Second Lebanon War in 2006, say he is guilty of espionage, incitement and the attempted arson of the Interior Ministry and police headquarters.
Many in Egypt felt the charges against Grapel were a farcical media show designed as a sop to the vehement anti-Israeli sentiments on Cairo's streets.
Nor has the timing of the Grapel exchange with Egypt, commensurate with terrorists-for-Shalit deal Israel is currently executing to orchestrate the release of kidnapped IDF solider Gilad Shalit, who has been held captive by the Hamas terror organization for over five years.
The kidnapping of Shalit, buttressed by an intense media campaign waged by his family, served as a lever to extort Israel into releasing 1,027 security prisoners - some 450 of them convicted terrorists - in exchange for his freedoms.
Observers note Grapel's arrest by officials in Cairo served much the same purpose.