Okay, now I got it. The alleged spy was said to be trying to recruit Egyptians to overthrow the military regime.
This story stunk from the beginning. I have no doubt that Egypt is crawling with spooks these days, including Israelis, but the absurd charge in this case reveals this to be a joint Egyptian/Israeli psy-op.
The current ruling junta in Egypt is the same criminal regime as before save the removal of Mubarak. He was only the manager, not the regime itself. The Egyptian tyranny now has a new management team, that is all.
The first thing it did was to declare that it would honor all treaties put in effect by Mubarak and his predecessor Sadat. Israeli spies are working for the military dictators, not against them. These are the same people who have been cooperating with the Israelis for decades. The Mossadniks currently in Egypt are there to help the junta quell the revolution and prevent the rise of a government which would be hostile to Israel and Western business interests..
The story linked below is propaganda designed to provide the counterrevolutionary goons now running Egypt some undeserved credibility with the people.
http://bikyamasr.com/wordpress/?p=34689