F-16US Department of Defense

Egypt has come out the big winner in negotiations for the release of U.S.-Israeli national Ilan Grapel, held prisoner by Cairo since June 12 after he inadvertently became caught up in the melee of Tahrir Square's Arab Spring uprising.

Delicate diplomatic wrangling by Israeli and American negotiators over the past five months managed to reduce the charge of espionage by Egyptian authorities down to "incitement" -- but demands for the release of Egyptian prisoners in exchange for Grapel's freedom resulted in both Israel and the United States being forced to fold.

On Israel's side 25 Egyptian prisoners, including three minors, will be taken to the Taba Crossing by 1:00 p.m. today (Thursday) to be transferred into Egyptian custody in exchange for the third-year Emory College law student.

But according to Egyptian military expert General Sameh Sayf al-Yazal, the United States has agreed to a much bigger deal: America will sell its much-acclaimed F-16 fighter to Cairo.

Yazal told the Bethlehem-based Ma'an news agency early Thursday that the U.S. agreed to the price during negotiations for Ilan's release -- a deal that had been rejected by Washington during the Mubarak years in order to maintain the balance of military power in the region.

Israel is being seen as having been the main obstacle to the deal in the past however, having objected to the U.S. selling the F-16 to Egypt because it would equalize Cairo's aerial capabilities with those of the IAF.

However, Israel's resistance to the sale has since diminished due to the development of the F-35, which Israel is set to receive within the next five years, and which will once again upgrade the IAF's regional military superiority.

Israel will spend more than $200 million per F-35i fighter aircraft, according to Defense Industry Daily. Delivery of the aircraft is not expected, however, until at least 2016.