JERUSALEM, 6 December 2004 — In a sign that relations strained by the Palestinian uprising were warming, Egypt freed an Israeli Druze jailed eight years ago for spying and the Jewish state released six Egyptian students.

Azzam Azzam, who was jailed in September 1997 for 15 years, was handed over at the Taba border crossing between the two countries, triggering scenes of joy in his home village in northern Israel.

Israeli Prime Minister Ariel Sharon promptly rang Azzam to welcome him home before personally thanking Egyptian President Hosni Mubarak.

Azzam in turn told Sharon that he felt “fortunate and proud to have been born in Israel”, according to a statement from the prime minister’s office.

Sharon told Mubarak that the two of them would be able to work “to reach great achievements for future generations.”

“Together we can achieve many things and I am sincere in these intentions,” he added in a telephone call.

His statement also raised the possibility of the release of some of the estimated 7,000 Palestinians being held in Israeli prisons.

Sharon had “ordered the relevant security authorities to consider the possibility of shortening the prison terms of Palestinian prisoners in accordance with previously determined criteria.”

Israeli officials confirmed the six Egyptians — Mustafa Abu Deif Ali, Mohammed Yusri Hussein Salem, Mahmud Gamal Ezzat Ali, Mustafa Mahmud Yussef Mohammed, Mohammed Maher Sayed Ahmed and Emad Sayed Ahmed Tuhami — had been freed.

All six were arrested in August on suspicion of trying to kidnap and assassinate Israeli soldiers.

The director general of Israel’s Foreign Ministry, Ron Prosor, told public radio that a warming in ties could see Egypt send an ambassador to Tel Aviv “in the near future”.

Diplomatic relations were downgraded after the September 2000 outbreak of the Palestinian intifada as part of Egyptian protests against Israeli tactics in trying to counter the uprising.

“Egypt and Israel are linked by peaceful relations and it is normal that Egypt should have an ambassador in Israel,” said Egyptian presidential spokesman Maged Abdel Fattah. “But this is linked to progress in the peace process.”

He denied, however, that the releases were part of any deal.

“There was no deal concerning this issue,” Abdel Fattah told journalists. “Judicial procedures were followed in both cases separately.”

The releases were the latest signal of a growing rapprochement between Israel and Egypt who have been working closely in recent months over next year’s planned pullout from the Gaza Strip. Although Israel had lobbied for Azzam’s release ever since his arrest, Egypt had consistently refused to “interfere” in the judicial process.

Yesterday, the swap drew criticism from opposition parties in Egypt and even from the father of one of the freed students.

“Nothing can justify this gift offered to Israel when this state is increasing its aggression against the Palestinians and Arabs,” said marxist Tagamoo party chief Hussein Abdel Razek. Yusri Hassan Salem, whose son Mohammed was freed in the exchange, said: “It’s an unequal swap. Our children are innocent while Azzam Azzam is a spy who has been tried as such and sentence.”