In the wake of the deal to free kidnapped Israeli soldier Gilad Shalit, Egyptian media outlets reported on Wednesday that Ilan Grapel, the Israeli being held in Egypt on spying charges, will soon be released as well.

Israel’s Channel 10 News cited a report in an Egyptian newspaper which said that based on understandings between officials at the American Embassy in Cairo, it was agreed that Egypt will release Grapel within hours and in return, Israel and the United States will release Egyptian prisoners.

The report was unconfirmed elsewhere.

On Tuesday, Egyptian state prosecutors said Grapel will also be charged with incitement to destroy government property, in addition to the spying charges.

The officials claimed witnesses have testified that Grapel encouraged them to set fire to police buildings.

Grapel, 27, has been in Egyptian custody since June. Egypt has accused him of attempting to recruit its citizens to work as agents for the Mossad, as well as inciting Egyptian youth to violence during the popular protests that saw the April 11 ouster of President Hosni Mubarak.

Earlier this week it was reported that Cairo is demanding that Israel free 81 Egyptian prisoners in exchange for Grapel’s freedom.

The demand was presented during the visit of U.S. Defense Secretary Leon Panetta, who traveled to Cairo partly with the intention of bringing Grapel back with him to the U.S. following talks. Instead, Panetta was forced to leave Egypt empty-handed.

Earlier reports had said that the Obama administration agreed to increase its political and financial support to Egypt, a fact which caused Egypt to agree to release Grapel. It was not clear what prompted Egyptian officials to refuse at the last moment to refuse to release the American-Israeli student and increase their prisoner exchange demands.

(Arutz Sheva’s North American Desk is keeping you updated until the start of Sukkot in New York. The time posted automatically on all Arutz Sheva articles, however, is Israeli time.)