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The Daily Telegraph has apologised to a popular Middle Eastern restaurant for “causing distress” after it sent a pro-Israel activist to the Sydney eatery as part of its so-called operation “undercover Jew”.

The apology was published on page two of the News Corp newspaper as part of an agreed joint statement to resolve a now settled legal dispute between the restaurant Cairo Takeaway and the pro-Israel activist Ofir Birenbaum.

The restaurant and Birenbaum also published the joint statement on their social media accounts, with Cairo also apologising unreservedly to Birenbaum.

But, just hours after the agreed statement published, the dispute ignited again after Birenbaum posted an additional “personal statement” claiming truth won and that he was “completely vindicated”.

His lawyer, Rebekah Giles, also labelled it “an important win for Ofir Birenbaum and the Australian Jewish community”.

Lawyers for Cairo Takeaway have responded, accusing Birenbaum and his lawyer of making statements that appeared to be inconsistent with the agreed joint statement “in both word and spirit”.

The original dispute began in February when Birenbaum went to Cairo Takeaway in February, wearing a Star of David cap and necklace alongside reporters from the Daily Telegraph. The undercover operation, later revealed to be dubbed “undercover Jew” internally by the paper, made international headlines after it backfired.

In August, Birenbaum launched defamation proceedings against the restaurant’s owner, Hesham El Masry, and staff member Talaat Yehia, for statements made in a series of social media posts. Birenbaum denied these versions of events, which the restaurant later deleted and apologised for prior to the defamation suit being launched.

The restaurant then countersued Birenbaum, accusing him of trespassing on the popular eatery in a bid to get a “negative reaction” from staff. The restaurant alleged they were targeted because of its pro-Palestine stance.

The exact details of the settlement remain confidential except for the agreed statement that was published by the two parties to the proceedings and the Daily Telegraph.

In the agreed joint statement, Cairo Takeaway accepted that Birenbaum was “polite to staff when he entered the premises and purchased a drink” and “unreservedly apologise to him for the false and defamatory statements to the media, Instagram posts and comments by members of the public directed at Mr Birenbaum on its social media accounts.”

This was followed with an acknowledgement by the Daily Telegraph that entering Cairo Takeaway “without notice, to see if Mr Birenbaum would be treated differently for the purpose of a news article, caused distress to the staff and owner of the Cairo Takeaway.”

“The Daily Telegraph unreservedly apologises to Cairo Takeaway and their staff for causing that distress,” the statement said.

Around the same time Birenbaum posted this statement to his 4,000 followers on Instagram, he also posted a personal statement saying “the truth wins”.

“This was never a stunt. It was legitimate public interest journalism at a time when antisemitism in Sydney was escalating, visible, and dangerous, and heading towards more violent and hateful atrocities,” he said.

“I stand by what we did and why we did it.”

He also shared a post by Australian Jewish News which said that Birenbaum had “won” the defamation proceedings.

Giles, his lawyer from Giles George, wrote a statement saying: “Public interest journalism matters – especially when it holds up a mirror to ugly sentiment and unlawful discrimination. This exercise should have been defended by all media - regardless of where they sit on the spectrum.”

Lawyers for Cairo Takeaway released a response disputing the claims.

“Cairo Takeaway did not intend to make any statement about the confidential settlement of the legal dispute between them and Ofir Birenbaum & The Daily Telegraph,” the statement from O’Brien Criminal and Civil Lawyers said.

“A joint statement had been agreed between the parties, and it was specifically agreed that nothing inconsistent with that statement would be published.”

“Unfortunately, it appears that Mr. Birenbaum and his lawyers have seen fit to state things that are inconsistent with that joint statement in both word and spirit.

“Cairo Takeaway disputes Mr. Birenbaum’s categorisation of the ‘Undercover Jew’ operation that he engaged in with the Daily Telegraph as ‘legitimate public interest journalism’.”

“It is hard to believe that the Daily Telegraph would apologise for the distress it caused to the staff and owner of the Cairo Takeaway if it currently viewed the story ‘as legitimate public interest journalism.’

“They all knew the Cairo Takeaway was a business that supported Palestine. That was why it had been selected for their “Undercover Jew” operation.”

“It is sad that what was meant to be a ‘positive example’ of a ‘constructive and satisfactory’ resolution is now attempting to be twisted.”

The agreed joint statement had ended by saying: “All parties are pleased that these issues have now been resolved in a constructive and satisfactory manner.”

“In doing so, they acknowledge that all Australians should be able to safely express their racial or religious affiliation as well as debate issues in a respectful and dignified fashion. The parties hope that the fact of a resolution can be a positive example for others.”

Court documents filed last year by the restaurant’s lawyers, O’Brien Criminal and Civil Lawyers, revealed an internal planning document that was created by the Daily Telegraph reporter Danielle Gusmaroli and dubbed “undercoverjew”.

“Undercover Jewish man Ofir Birenbaum sees what it’s like being Jewish in Sydney. Will secretly film with his video glasses,” court documents show she wrote.

Birenbaum has denied that he wore video glasses.

Gusmaroli then listed Newtown, Blacktown, Bankstown and Arncliffe as areas where they may go to “film peopls [sic] reactions to this Jewish [sic] man in their neighbourhood”.

Giles said in response to Cairo Takeaway lawyer’s comments about Birenbaum’s personal statement: “Mr Birenbaum is free to explain his reasons for participating in this public interest journalism investigation” which include past public statements from the cafe and social media posts by staff.