UPDATE 5-Father of Israeli held in Egypt denies son is a spy
* Former soldier trned in pro-Israel public relations
* Writes on Facebook he is "preaching" in Cairo school
(Adds Israel Radio report, paragraph 4)
By Jeffrey Heller
JERUSALEM, June 13 (Reuters) - The father of a man Egypt has arrested as an Israeli spy said on Monday his son was a student who volunteered for a U.S. refugee agency and described Egypt's allegations as "totally delusional".
Ilan Grapel, a U.S. immigrant to Israel, was detained on Sunday, which could strain Israel's relations with Egypt's new leaders.
"This whole story is totally delusional as far as I am concerned ... Any connection to working with the Mossad (the Israeli spy agency) is(wrong)," Daniel Grapel, Ilan's father told Israeli Channel 2 from his home in New York.
Israel Radio reported that an unnamed senior official accompanying Prime Minister Benjamin Netanyahu on a trip to Rome said the allegations had been checked and there was "not even a smattering of connection to reality" in them.
Ilan Grapel once wrote that he hoped to promote Israeli policies in the Arab world, according to information he and others posted on websites. Daniel Grapel said his son was working in Egypt as part of his university studies.
"He is volunteering as part of his studies and he gets (academic) credits for summer work ... He had to stay in Egypt for three months as part of the American agency that is connected with transferring refugees from Egypt," he said.
Grapel's mother, Irene, said her son had worked for Saint Andrew's Refugee Services, a non-governmental organisation, in Cairo, adding that he holds U.S. and Israeli citizenship.
On his Facebook page, Grapel made no secret of his presence in Egypt, writing that he was "preaching at al-Azhar", an Islamic university in Cairo, and that he had studied at Johns Hopkins University in Baltimore, Maryland. The reference to al-Azhar later disappeared from the page.
The U.S. embassy in Cairo confirmed 27-year-old Grapel had been detained on Sunday. "A consular officer visited Mr Grapel on June 13 and confirmed that he was in good health," the embassy said in a statement.
In Washington, State Department spokesman Mark Toner declined to comment on the merits of the case.
"Right now, our function...is to provide him with consular services (and) work with local authorities to make sure he's being treated fairly under local law," Toner said.
Israel's ambassador to Cairo said on Monday Israel was looking into the case.
A Egyptian judiciary source said Grapel had been active in Cairo's Tahrir Square, the epicentre of the revolt that toppled president Hosni Mubarak.
A statement issued by Egypt's public prosecutor said the suspect, ordered to be held for 15 days, had been sent to Egypt to recruit agents "trying to gather information and data and to monitor the events of the Jan. 25 revolution".
Ex-Israeli Defence Minister Binyamin Ben-Eliezer, a former pointman in Israel's relations with Egypt, told Israel Radio he hoped the arrest was not an attempt to "put peace into total freeze". Egypt signed a peace treaty with Israel in 1979 which ordinary Israelis refer to as "the cold peace".
Photographs of Grapel on the Facebook page, on the website of the Israel Project -- a pro-Israel group where he trained in media relations in 2008 -- and in the online newsletter of an organisation that raises funds for Israeli soldiers, matched those in a video clip of the suspect broadcast by Egypt.
Articles about Grapel's military service in Israel appeared in the New York Daily News and Israel's Haaretz newspaper in 2006. They said he had been wounded in the Lebanon war that year while serving as an Israeli paratrooper and had immigrated to Israel in 2005 from Queens, New York, at the age of 22.
"He is a very special guy. He's an Arabist," Tsiki Ood, who said he was a friend of Grapel's, told Israel Radio, describing him as an American immigrant. "He's very intelligent ... He spoke Arabic. I hope he gets out of this trouble."
After the war, Grapel spoke in the United States at fundraisers for wounded Israeli soldiers, according to the Internet newsletter of the Friends of the Israel Defense Forces organisation, which also cited his injury in Lebanon.
It showed him in a paratroop uniform standing next to U.S. fundraisers and Israeli diplomats in Chicago and Houston in 2006.
Two years later, Grapel took part in the Israel Project's media fellows programme in Jerusalem on "educating top young leaders in how to educate the press on Israel and Iran".
In a comment that appears on the Israel Project's web page about the programme, Grapel said he had been impressed by an Israeli Foreign Ministry official's briefing on conveying Israel's positions to the Arab world.
"It would be very rewarding for me if I were to be able to communicate as effectively (as the official) in such anti-Israel environments," Grapel wrote. (Additional reporting by Ori Lewis, and Edmund Blair in Cairo; Editing by Matthew Jones)
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