A well-known Egyptian human rights activist jailed in July for tarnishing Egypt's image has been released and will get a new trial. The case has caused strained relations between Egypt and the United States.

Egypt's highest appeals court overturned the conviction of Saad Eddin Ibrahim and ordered a re-trial to begin January 7.

The ailing 64-year-old sociology professor at American University in Cairo was sentenced in July to seven years in prison for tarnishing the country's image in an article that accused Egypt of persecuting its Christian minority. He was also found guilty of accepting foreign funds without government approval.

It was the second time the human rights activist had been found guilty on the same charges. In May of 2001 he was also sentenced to seven years in prison, but Egypt's appeals court overturned that conviction and ordered a re-trial.

Now the appeals court will hear the case directly.

Human rights organizations charged Mr. Ibrahim's conviction was politically motivated. In protest of the conviction, President Bush announced the United States would oppose aid to Egypt beyond the two billion dollars it receives annually.

Political analyst Mohammad Kamal, who teaches political science at Cairo University, says the Egyptian government will be glad when the case is finally resolved.

"This issue created a headache for the government. I am sure the government will be happy if it could get rid of this issue one way or the other," he said. "The issue complicated the relationship between Egypt and the United States. The Egyptian point of view is this is a legal issue not a political issue and it is up to the courts to decide if he is guilty or not. The Egyptian government does not want to politicize this issue which, of course, is different from the American point of view which puts political emphasis on the issue."

Egyptian President Hosni Mubarak refused calls to pardon the activist, saying it was a matter for the courts to decide.

Mr. Ibrahim, who suffers from a neurological disorder that blocks the flow of oxygen to parts of his brain, holds Egyptian and U.S. citizenship.