Top Egypt court rejects islands transfer to Saudi Arabia
The government had appealed against a lower court ruling in June that found the controversial border demarcation agreement was illegal.
The court on Monday said it was its "unanimous" decision that the two islands, Tiran and Sanafir, were sovereign Egyptian territories.
The courtroom erupted in cheers as the judge delivered the verdict, with lawyers and activists chanting: "These islands are Egyptian."
|Read also: Saudi Arabia-Egypt 'needed Israel's blessings' for island deal go-ahead|
The agreement, announced in April, and signed during a visit by Saudi King Salman, caused public uproar and protests by Egyptians who said the islands belonged to to Cairo.
The controversy has become a source of tension with Saudi Arabia – which has provided billions of dollars of aid to Egypt – reportedly including oil deliveries, direct investment, and deposits in the central bank to shore up Egypt's depleted currency reserves.
But Egypt froze the islands' handover process following the protests and legal action taken by Egyptian oppositionists that led to a court order annulling the agreement, saying Egyptian sovereignty over the islands could not be given up.
Tiran and Sanafir are situated in the narrow entrance to the Gulf of Aqaba leading to Jordan and Israel.
Saudi and Egyptian officials say they belong to Saudi Arabia and were only under Egyptian control because Riyadh asked Cairo in 1950 to protect them.
Lawyers who opposed the handover said Cairo's sovereignty over the islands dated to a 1906 treaty, before Saudi Arabia was founded.
Agencies contributed to this report