An Iranian prosecutor says imprisoned American Sarah Shourd could be soon free on bail.  But the official says that Shourd, whose release was unexpectedly announced last week then just as abruptly postponed, would still face trial.   

Tehran prosecutor Abbas Jafari Dolatabadi says Sarah Shourd will be released on bail for medical reasons.

Speaking on state television, the prosecutor said the prisoner is sick and Iran can help her health condition.  He said a judge has converted her detention to half a million dollars bail and she would be released from prison as soon as the bail was paid.

Shourd's mother has said her daughter has a pre-cancerous cervical problem and a lump in her breast that have gone untreated.

Shourd and fellow Americans Shane Bauer and Josh Fattal, were arrested more than a year ago along the Iran/Iraq border.  Their families say the three had been hiking in Iraqi Kurdistan when they accidentally strayed over the poorly marked border.

Iran has accused them of illegal entry and, later, of spying, in a case that has further strained already tense relations between Iran and the U.S.  According to the prosecutor Sunday, the case will go ahead.

Dolatabadi says there is enough evidence for trial, indictments have been completed and the trials can now be held.

The payment of bail could pose a problem for her family or friends, as the United States and others have strict sanctions in place against financial transactions with Iran.

Last week officials had said Shourd would be released Saturday from Evin prison, where she has been held in solitary confinement.  The move was seen as an act of clemency arranged by President Mahmoud Ahmadinejad to coincide with the Muslim holiday Eid al-Fitr.  The judiciary then nixed the release citing legal issues, a countermeasure that has further stoked speculation about a possible rift inside the government.