Iran ready to release US woman hiker on 500,000 dollars bail

"For the female defendant (Shourd), bail has been set at five billion Iranian rials (around USD 500,000)," the official IRNA news agency quoted Tehran prosecutor Abbas Jafari Dolatabadi as telling reporters.

"She can be freed by posting the bail... Her lawyer has been informed." Shourd was arrested with fellow hikers Shane Bauer and Josh Fattal on July 31, 2009 after straying across the border from neighbouring Iraq.

Dolatabadi said the decision to free Shourd on bail was taken after "the judge confirmed Ms. Shourd's illness."

Shourd's mother Nora told AFP last month that her daughter was being held in solitary confinement despite suffering from a pre-cancerous cervical condition, a lump in her breast and depression.

Iranian authorities have accused the three Americans of illegally entering the Islamic republic and of spying. But they insist they entered the country by mistake after getting lost during a trek in Iraqi Kurdistan.

Dolatabadi said that there were "enough reasons to accuse the three of espionage."

"The case is nearly complete and the judge has issued an indictment for the three Americans accused of spying," he said, adding that Bauer and Fattal had been remanded in custody.

"It has been proven that they illegally entered through the Kurdistan border. Also the equipment and supplies they were carrying are only used for spying," Dolatabadi was quoted by the Mehr news agency as saying.