|Ilan Chaim Grapel is accused of sowing sectarian strife and chaos in Egypt after a popular uprising
Egypt's state security prosecution has begun questioning an Israeli man suspected of spying for the Mossad intelligence agency, the official MENA news agency says.
The man, detained on Sunday, was identified as Ilan Chaim Grapel.
A judiciary source in Egypt said Grapel had been active in Cairo's Tahrir Square, the epicentre of the revolt against Hosni Mubarak, the country's long-time president.
A statement issued by Egypt's public prosecutor said the suspect, ordered 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 January 25 revolution".
The US embassy in Cairo confirmed on Monday that Grapel is a "US-Israel dual national" and said US consular staff had visited him.
"We have confirmed that Ilan Chaim Grapel, age 27, is a US citizen and was detained on June 12, 2011 by Egyptian authorities.
"A consular officer visited Mr Grapel on June 13 and confirmed that he was in good health. Mr Grapel’s family is aware of his arrest.
"As is the case with all US citizens arrested overseas, consular officers visit the detained citizen, work with local authorities to make sure he is being treated fairly under local law, provide information about the legal system, and facilitate communication with family and friends in the US."
News of Grapel's arrest was plastered over the front pages of the Egyptian press on Monday, with the state-owned Al-Akhbar describing it as a "painful Egyptian hit against the Mossad".
Authorities said on Sunday that he had been "posing as a foreign correspondent," and that his movements and phone calls had been monitored before his arrest.
Several pictures of Grapel were released showing him in Israeli army uniform posing with other soldiers, and shaking hands with worshippers at a mosque in Cairo.
Another picture shows Grapel standing in Tahrir Square - the symbolic heart of protests that brought down Mubarak - wearing sunglasses and holding a large sign that read: "Oh stupid Obama, it is a pride revolution not a food revolution."
Grapel's father dismissed the spy allegations his son is accused of, and said his son was a student who volunteered for a US refugee agency and described Egypt's allegations as "totally delusional".
Israel's foreign ministry said on Sunday it was unaware of any reports of Israeli citizens being detained in Egypt.
Israeli commentators said reports that an Israeli citizen had been arrested for spying for the Mossad in Cairo seemed strange.
"I can't imagine that there will be any Israeli reactions, but anyone who knows even a little bit about these things knows that you don't have an Israeli with an Israeli passport sitting in a foreign capital collecting things," Ehud Yaari, a Channel 2 news analyst, said.
Binyamin Ben-Eliezer, a former Israeli defence minister and point man in Israel's relations with Egypt, said on 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".
Last year Egypt said the confessions of an Egyptian accused of spying for Israel had led to three espionage cells being dismantled in Lebanon and Syria.