Egypt court sides against government in Saudi islands case

An Egyptian court has upheld a ruling by a lower tribunal that annulled President Abdel Fattah al-Sisi's decision to transfer two strategic islands to Saudis.

The deal was announced in April during a landmark visit by King Salman to Cairo, paving the way for the transfer of sovereignty over the islands of Tiran and Sanafir from Egypt to Saudi Arabia.

"This enables both countries to benefit from the exclusive economic zone for each, with whatever resources and treasures they contain," the Egyptian cabinet said in a statement.

It added that the determination that the two islands fall within Saudi regional waters was the culmination of a six-year process of studies and eleven rounds of negotiations between the two sides.

According to the Egyptian government, the two uninhabited islands are Saudi but have been in Egypt's custody for "protection" since 1950.

The government had appealed the lower court's decision from June before three separate courts. Tuesday's ruling came from one of the three, the Administrative Court of the State Council. The other two have yet to rule in the case.

The verdict comes amid tension between Egypt and Saudi Arabia, traditional allies who are now at odds over regional conflicts.

Saudi Arabia, which poured billions of dollars in aid to Egypt since Sisi rose to power, this week indefinitely halted previously agreed fuel shipments to Egypt.