Egypt has arrested a New York native and former Israeli paratrooper on suspicion of spying. Israel says the claim is nonsense.

"I can't imagine that there will be any Israeli reactions, but anyone who knows even a little bit about these things knows that you don't have an Israeli with an Israeli passport sitting in a foreign capital collecting things," said Channel 2 news analyst Ehud Ya'ari.

The Foreign Ministry denied the accusation and has said it has not received any verification of the arrest of Ilan Grapel, who was wounded in the Second Lebanon War. Several Israeli politicians said the arrest was carried out only in order to show Egyptians an anti-Israeli policy.

Egyptian authorities took Grapel into custody on Sunday from a Cairo hotel and will be held for 15 days while being investigated, according to the Egypt Gazette. His picture covered the front pages of newspapers in Egypt, and the state-owned Al-Akhbar described the arrest as a "painful Egyptian hit against the Mossad."

One picture showed him in an IDF army uniform and shaking hands with Muslims at a mosque in Cairo. Another photo shows Grapel supposedly holding a microphone in a mosque and apparently preaching.

A third picture shows him wearing sunglasses in Tahrir Square and holding a large sign starting, "O stupid Obama, it is a pride revolution, not a food revolution.”

Grapel is accused of having posed as a foreign journalist while trying to create chaos after the uprising that forced the ouster of Egyptian President Hosni Mubarak earlier this year. Grapel had learned Arabic and is known to have traveled to Arab countries.

If he did try to create disturbances towards the regime, it is more probable that he did so as an activist and not as a spy, acquaintances have indicated.

Egypt's provisional military regime has shown an anti-Israeli stance amid calls for an abolition of the 1979 peace treaty between the two countries. Until two days ago, the regime had suspended the flow of natural gas following another disruption to the flow and is demanding a higher price than stated in the original contract. Terrorists have sabotaged the pipeline at least twice.