US-Israeli citizen Ilan Grapel, held in Egypt on allegations of espionage, has arrived in Israel after being freed under a prisoner exchange deal, Israeli media reported on Thursday.

The reports said Grapel had touched down at Israel's Ben Gurion airport shortly after Israel transferred 25 Egyptian detainees to the Sinai under the swap deal.

The exchange saw Israel free 25 prisoners, three of them minors, convicted of illegally entering the Jewish state or for smuggling drugs or weapons.

The men were returned to Egypt via the Taba border crossing as Grapel was handed over to two Israeli officials in Cairo.

He then boarded a private plane to Tel Aviv and was expected to meet briefly with Israeli Prime Minister Benjamin Netanyahu in Jerusalem before flying to New York.

Grapel, 27, was arrested in Cairo in June and accused of working for Israel's Mossad spy agency and sowing sectarian strife in Egypt, allegations he denied.