In his first trial, Hisham Talaat Moustafa was convicted of paying a former policeman $2 million to kill the 30-year-old singer, who was his ex-girlfriend, in July 2008.
The two men were sentenced to death, but an appeals court ordered a new trial, citing incorrect legal procedures and insufficient evidence.
On Monday, both men pleaded not guilty.
Mustafa has close ties to the centers of power in Egypt. He is a member of parliament and a senior ruling party figure.
The allegations against him shocked Egyptians unused to seeing powerful politicians taken to court.
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