JERUSALEM, Aug 27 (Reuters) - Abie Nathan, an Israeli peace activist who blazed trails to Egypt and the Palestinians that his country would eventually follow, died on Wednesday. He was 81.

Nathan famously piloted a private plane, dubbed Shalom (Peace) 1, to then enemy Egypt in 1966 and was twice imprisoned by Israel for meeting Palestine Liberation Organisation chief Yasser Arafat in the late 1980s and early 1990s when such contacts were illegal.

"He was a great fighter against war, poverty and discrimination," Israeli President Shimon Peres said in a statement after Nathan's death in a Tel Aviv hospital.

A former pilot for Israel's El Al airline and once the owner of a Tel Aviv restaurant that attracted the city's "glitterati" in the 1960s, the Iranian-born Nathan worked for decades to secure humanitarian aid for disaster areas worldwide.

From 1973 to 1993 his "Voice of Peace" radio station, on a ship anchored off the Israeli coast, broadcast pop music and messages of peace in English, Hebrew and Arabic.

Short of funds to continue to operate the station, he scuttled the vessel in 1993, the same year Israel and Arafat's PLO signed their first interim peace deal.

Nathan suffered a severe stroke in 1997 and had been in ill health since.

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