Jon Stewart has taken the guest's seat on Egypt's top satirical TV show, modelled after his own American programme, The Daily Show.

Stewart was brought to the set wearing a black hood and introduced by host Bassem Youssef as a captured foreign spy, then unmasked by the Egyptian host, to a raucous welcome from the audience.

Stewart, wearing a scruffy beard, spoke briefly in Arabic as the studio erupted in applause and cheers. "Please sit down, I am a simple man who does not like to be fussed over," he said in Arabic to laughter.

Youssef, host of the show Al-Bernameg and one of Egypt's most popular TV presenters, has previously been questioned by prosecutors on accusations of blasphemy and insulting the president. Stewart defended his counterpart and friend in one of his monologues after Youssef was interrogated earlier this year, and Youssef has appeared as a guest on the popular New York-based show.

Stewart, who is on a summer-long break from anchoring the Comedy Central fake newscast, is in the Middle East making his first movie. He expressed admiration for Youssef in Friday's episode, which was recorded earlier this week during a visit to Cairo.

"Satire is a settled law. If your regime is not strong enough to handle a joke, then you have no regime," Stewart said, adding that Youssef "is showing that satire can be relevant."

True to form Youssef began the weekly show with a series of jokes about Islamist President Mohamed Morsi's appearance and address at a rally last weekend hosted by his hardline Islamist backers. The president, Egypt's first freely elected leader, announced at the rally a complete break of diplomatic relations with the government of Syrian President Bashar Assad.

Youssef, however, criticised Morsi for remaining silent and wearing a stone face while one of the rally's organisers denounced as non-believers opposition protesters planning massive, anti-government demonstrations on 30 June, the anniversary of the start of the president's term.

Stewart said he was overwhelmed with the generosity of Egyptians but took a jab at Cairo's horrendous traffic. "I flew in three days ago and I have just arrived to do the show," he joked.

Youssef – known as Egypt's Jon Stewart – was interrogated in April for allegedly insulting Islam and the country's leader. His questioning drew criticism from Washington and rights advocates. A trained heart surgeon, Youssef catapulted to fame when his videoblogs mocking politics received hundreds of thousands of hits shortly after the 2011 uprising that toppled longtime leader Hosni Mubarak.

Unlike other local TV presenters Youssef uses satire to mock fiery comments made by ultra-conservative clerics and politicians, garnering him a legion of fans among the country's revolutionaries and liberals. He has 1.4 million fans on Facebook and nearly 850,000 followers on Twitter.

During his hiatus Stewart will be directing and producing Rosewater from his own script based on a memoir by Maziar Bahari. The Iranian journalist was falsely accused of being a spy and imprisoned by the Iranian government in 2009 while covering Iran's presidential election.