By Marwa Awad and Tamim Elyan
CAIRO (Reuters) - Egypt has decided to lift a travel ban preventing American pro-democracy activists from leaving the country, judicial sources said Wednesday, a move that is likely to defuse a standoff that has plunged U.S.-Egyptian ties into a crisis.
U.S. Secretary of State Hillary Clinton said she had no confirmation that the travel ban was lifted but also said she expected the row over the activities of non-governmental organizations (NGOs) to be resolved "in the very near future."
U.S. officials have said $1.3 billion in annual military aid has been put at risk by the case.
Washington ties with Cairo have been a cornerstone of its Middle East policy since Egypt in 1979 became the first Arab state to sign a peace deal with Israel.
It was not immediately clear when any of the activists involved would leave the country. Sixteen of the 43 people facing charges are Americans. Seven Americans are in Egypt and some of those have sought refuge in the U.S. embassy.
"The assistant to the attorney general, following a request from the investigating judges, has issued an order to lift the ban," a judicial source close to the proceedings told Reuters, adding the charges have not been dropped against any of those involved.
Judge Abdel Moez Ibrahim, head of the Cairo Appeals Court who appoints judges to the case, also confirmed to Reuters that a decision had been taken to lift the travel ban.
Asked for the nationalities of those affected by the decision, he said: "All of them are Americans."
FOREIGN FUNDS
The U.S. embassy had no immediate comment. The Egyptian military also had no comment on the case.
"We do not have confirmation that the travel ban has been lifted. We hope that it will be, and we will continue to work toward that," Clinton told U.S. lawmakers when asked. "The reporting is encouraging but we have no confirmation."
Earlier, she had said: "We believe we will resolve this issue concerning our NGOs in the very near future. That is my best assessment sitting here today."
The NGO workers also include Egyptians, Serbs, Norwegians and Germans. They have been accused of receiving foreign funds without the approval of the Egyptian authorities.
The workers are also alleged to have carried out political activities unrelated to their work and accused of failing to obtain necessary operating licences.
The NGOs say they have long sought to register in Egypt and describe the crackdown as part of a wave of repression against civil society by the generals who took power after President Hosni Mubarak's overthrow last year.
Two of the groups involved, the National Democratic Institute (NDI) and the International Republican Institute (IRI), are loosely affiliated with the major U.S. political parties and one of the accused, IRI Egypt Director Sam LaHood, is the son of U.S. Transportation Secretary Ray LaHood.
The first session of the court took place Sunday and was adjourned to April 26. That adjournment had raised hopes among activists' supporters that the case could be dropped to spare further damage to Egypt's ties with its ally.
A day before the decision to lift the travel ban, the Egyptian judge who had handled the trial resigned without giving any reasons.
(Additional reporting by Arshad Mohammed in Washington; Writing by Marwa Awad; Editing by Edmund Blair)
