The security cabinet unanimously approved an agreement Tuesday for the release of Israeli-American law student Ilan Grapel, who has been in jail in Egypt since June 12 on spying allegations that were later reduced to incitement.

In exchange, Israel will release 22 Egyptian prisoners, most of them Bedouin from the Sinai jailed for smuggling drugs or weapons. No one being freed was convicted of killing Israelis; the maximum sentence was about 10 years.

Diplomatic sources said MK Israel Hasson's success in wrapping up the deal and Egypt's help achieving the release of Israeli soldier Gilad Shalit have greatly improved relations between Israel and Egypt.

In addition, Israel will release three Egyptian juveniles who have not yet stood trial but are accused of crossing into the country illegally. The prison service published a list yesterday on its website of the Egyptians slated for release.

The public has 48 hours from the publication of the list to file any objections to the High Court of Justice. The prisoner exchange is expected to take place tomorrow afternoon with Grapel to arrive in Israel via the Taba border crossing at Eilat.

The security cabinet was briefed on the deal by Isaac Molcho, an adviser to Prime Minister Benjamin Netanyahu, and Hasson, an MK of the centrist Kadima party. The two directed the contacts between Israel and Egyptian intelligence.

Molcho and Hasson said the Grapel case should not be viewed as merely a prisoner swap but rather as part of the maintenance of the peace agreement with Egypt. The success in resolving the Grapel case suggests that Egypt seeks to defuse tensions with Israel, they said.

Hasson was appointed to handle the case at the request of the Egyptians; he has worked closely with Egyptian security officials. Over the past several weeks he has made several trips to Cairo to discuss the terms of the deal.

Molcho and Hasson told the security cabinet that Egypt did not want to link the Grapel deal with the case of Odeh Tarabin, an Israeli Bedouin who has been imprisoned in Egypt for the past 11 years on spying allegations. But Netanyahu told defense officials and the Foreign Ministry to make every effort to gain Tarabin's freedom. A senior Israeli official said talks on Tarabin's release would continue in the coming weeks.

The Prime Minister's Office issued a statement thanking the U.S. administration for its help in getting Grapel freed. The United States put pressure on the Egyptians, maintaining that Grapel was not an Israeli spy and noting that he is an American citizen as well.

Meanwhile, Egyptian media outlets are claiming that the released Egyptians were jailed in Israel for security-related offenses. The Egyptian media have characterized the Grapel prisoner exchange as the largest carried out between Egyptian intelligence and Israel.