Security and judicial sources said in the days following the concert that at least six people were arrested over the incident on charges including “inciting immorality”.
After an online campaign, a court ruled to release two of the concert-goers, Sarah Hegazy and Ahmed Alaa, on bail of 1,000 Egyptian pounds ($56, 47 euros) for the duration of an ongoing investigation, lawyer Hoda Nasr told AFP.
The pair, who still face charges of “belonging to an illegal organisation and inciting debauchery”, should be released from detention on either Wednesday or Thursday, she said.
Since the rainbow flag was raised at the outdoor concert the Egyptian authorities have also clamped down on alleged homosexuals in the country, with rights group Amnesty International saying more than 70 people have been detained.
In November, 14 men put on trial for being gay were convicted to three years each in jail for “abnormal” sexual relations, a defence lawyer said.
Homosexuality is not expressly outlawed in Egypt, but gays have previously been charged with debauchery in the deeply conservative Muslim society.
Scores of Egyptian lawmakers in October proposed draconian legislation to explicitly outlaw same-sex sexual activity.
Amnesty called the proposal a “huge setback for human rights and another nail in the coffin for sexual rights in Egypt”.