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JEDDAH, Saudi Arabia (Reuters) - An Egyptian lawyer whose arrest in Saudi Arabia in April triggered a diplomatic spat between Cairo and Riyadh denied charges of drug smuggling at a court hearing on Wednesday, according to a lawyer who attended the session.

"Ahmed el-Gezawi represented himself... and denied all the charges against him of drug possession and smuggling," Sulaiman al-Hunaini, a Saudi lawyer, told Reuters.

Gezawi was arrested for alleged drug possession upon his arrival at Jeddah airport in April. That touched off angry protests outside the Saudi embassy in Cairo with almost 1,000 people hurling insults at the kingdom's rulers.

As a result, Riyadh recalled its ambassador on April 28 - a sign of Saudi anxiety about the future direction of a formerly close ally after last year's popular revolution that toppled autocratic president Hosni Mubarak.

The Saudi ambassador returned to Cairo a week later after high-level Egyptian delegations visited Riyadh to assure the Saudi authorities they were committed to good relations.

Saudi Arabia is a major donor of aid to Egypt and the two states were close, coordinating policy together with the United States on a range of issues during Mubarak's 30-year rule.

The Egyptian consulate in Jeddah has assigned a legal adviser to Gezawi's case and he attended Wednesday's session. The case was adjourned to September 26.

Gezawi's activist supporters in Cairo say he had helped Egyptians facing trial in the Saudi criminal justice system. International human rights groups say Saudi trials are frequently conducted unfairly, an accusation Riyadh denies.

Gezawi was charged with smuggling around 21,000 pills of the anti-anxiety drug Xanax into Saudi Arabia. His former lawyer - who quit the case because Gezawi failed to pay legal fees - has said the public prosecution is seeking the death penalty.

Saudi Arabia, which applies a strict reading of sharia (Islamic law), often executes convicted criminals - usually by public beheading - for a range of offences including murder, rape and drug smuggling.

(Reporting by Asma Alsharif; Editing by Mark Heinrich)

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