Egypt Buffeted by Regional Turmoil

  • Egypt has a direct and material stake in an end to the Gaza conflict, and its officials are central actors in the diplomacy to arrange an end to the Hamas-Israel war.
  • Israeli demands to exercise enduring security control on the Gaza-Egypt border have strained relations between Egypt and Israel and complicated ceasefire negotiations.
  • A ceasefire that ends attacks on commercial shipping by the Iran-backed Houthi movement in Yemen might reverse the damage to Egypt’s economy caused by the attacks.
  • In addition to Gaza, the civil war flaring in Sudan is creating refugee flows and spotlighting Egyptian human rights abuses.

Virtually no Middle Eastern state has been as severely affected by the October 7 Hamas attack and resulting war in Gaza as has Egypt. Cairo governed the Palestinian-inhabited Gaza Strip from the time of the UN establishment of Israel in 1948 until the 1967 Six-Day War, in which Israel captured control of the territory. As talks to end the Gaza war proceed haltingly, Israel’s demands to try to ensure that Hamas can no longer govern or wield military force in the enclave hold the potential to upend Israeli-Egyptian security arrangements established by the 1979 peace treaty between them and to inflame Egyptian public opinion that is overwhelmingly pro-Palestinian.

Assessing an end to the war as vital to Egyptian security and domestic harmony, Egyptian diplomats and its intelligence chief, Abbas Kamel, have been central to the diplomacy that continues to strive, despite repeated setbacks, to achieve a ceasefire and hostage release by Hamas. After a several-week period in which Israel and Hamas appeared to be at an impasse, a reported key Hamas concession in late June led to a resumption of intense diplomacy in Cairo and Doha on the details of a three-stage ceasefire and war termination plan advanced by U.S. President Joseph Biden on May 31. Still, illustrating the degree to which Israeli and Hamas goals continue to differ, the truce talks appeared to stall again on July 13. Egyptian security sources accused Israeli negotiators of advancing new demands in the talks as part of what is widely seen as Israel’s intent to retain the ability to conduct military operations against Hamas indefinitely.

Control over the Gaza-Egypt border has emerged as a key point of contention not only between Hamas and Israel but also between Israel and Egypt. Israeli forces took control of that border crossing when they began their offensive against Hamas forces in the border city of Rafah in early May. Israel’s advance into Rafah led to the closure of that border crossing into Egypt and a sharp reduction in the amount of international aid entering Gaza. Egypt says it wants aid deliveries to Gaza to resume but that a Palestinian presence should be restored at the Rafah crossing for it to reopen.

Cairo’s strategy has consisted of ‘containment’ – an effort to ratchet up international pressure on Israel by conditioning the reopening of the Rafah Crossing on the IDF’s withdrawal from the area and returning control over the crossing to Palestinians. Egypt is simultaneously pressuring Israel to ensure the continued flow of aid from other land crossings under Israeli control, such as Kerem Shalom and Erez. In May, Cairo sought to put teeth in its insistence on Israeli border arrangement concessions by announcing its support for South Africa’s genocide case against Israel at the International Court of Justice (ICJ).

The tensions created by the Israel Defense Forces (IDF) presence on the border were illustrated and heightened by a May 27 incident in which an Egyptian soldier was killed in a clash with Israeli soldiers near the Rafah Border Crossing. There were no casualties among Israeli forces. The IDF described the incident as “a shooting incident” on the border. Cairo has come under scrutiny from international aid agencies for its refusal to accept Palestinian refugees fleeing the Gaza Strip. Despite Egypt’s policies, more than 115,000 Gazans have crossed into Egypt since the October 7 Hamas attack, according to estimates by the West Bank-based Palestinian Authority (PA). The Egyptian government refuses to give the Palestinian refugees any legal status, and they cannot travel onward.

Egyptian leaders agreed with Hamas that Israel would not be allowed to keep its forces on the Gaza side of the Egypt-Gaza border in the post-war period. Footage of Egyptian aid being inspected by Israeli soldiers permanently would, in the view of experts, inflame Egyptian public opinion against Israel and against upholding the Israel-Egypt peace treaty. Israel’s control over the Rafah crossing and videos of Israeli armored vehicles waving a giant Israeli flag along the Philadelphi Corridor (the 100-meter-wide road that splits Gaza and the Egyptian borders) have been exceptionally provocative on Egyptian social media.

Israeli officials note there is joint understanding by the U.S., Egypt, and Israel of the need to block the Philadelphi Corridor and prevent arms smuggling to Hamas through underground tunnels. Yet, apparently underestimating the political difficulty for Egypt’s President Abdel Fattah El Sisi, on July 11, Israel’s Prime Minister Binyamin Netanyahu said he could only agree to a war termination deal that preserves Israeli control of the Gaza-Egypt border.

Netanyahu’s statement did not spell out whether Israeli “control” automatically implies having IDF troops physically present there – leaving room for a new formula that does not involve an IDF presence at the border. Apparently, with help from U.S. officials, Israeli and Egyptian negotiators forged a consensus in talks during July 9-10 in Cairo to replace Israeli forces on the border with an electronic surveillance system to be built on the Egyptian side of the Corridor. Egyptian leaders are said to agree to the surveillance system if it is supported and paid for by the United States, according to Egyptian security sources. The system would satisfy Egyptian demands that there be no change to the border arrangements between Israel and Egypt, which were set out in their 1979 peace treaty. Israeli officials say their U.S. counterparts have pledged direct U.S. involvement in building infrastructure on the border, such as an underground “wall” that detects attempts to dig tunnels so that they can be destroyed in real-time.

Egypt is hoping a Gaza solution materializes not only to ease border tensions with Israel but also to calm the regional spillover that is harming its economy. In support of Hamas, the Houthi movement has been attacking commercial shipping in the Red Sea. Houthi leaders say they will continue the attacks until the Gaza war ends and have seemed impervious to U.S.-led strikes on their missile and drone arsenals. The attacks have sharply reduced the use of the Red Sea by commercial shipping firms, reducing the transit fee revenue Egypt receives from the Suez Canal by more than 50 percent, according to the economic committee of the Egyptian House of Representatives. In dollar terms, the committee estimates Egypt will lose $6 billion in revenue during the fiscal year ending June 30. Suez Canal revenues have accounted for just over 2 percent of Egypt’s gross domestic product (GDP), and the loss of half of the canal’s transit fees has significantly dampened Egypt’s economy and living standards. An end to the Houthi missile strikes on shipping will likely, although perhaps not immediately, bring lost shipping traffic back to the Red Sea and restore the lost revenue stream.

Compounding Cairo’s recent difficulties has been the ongoing civil conflict in Sudan that broke out in the spring of 2023. That war has consisted of combat between the Sudan Armed Forces and the paramilitary Rapid Support Forces (RSF) and has caused thousands of Sudanese to flee to Egypt. Cairo initially backed the Sudanese army but, more recently, has sought to work with Saudi, U.S., and other diplomats to bring about a ceasefire and end the conflict.

Egypt has also come under criticism from international human rights groups, including Amnesty International, for arbitrary detention and forced returns of Sudanese refugees, allegedly without due process or opportunity to claim asylum. In early June, Egyptian Minister of Foreign Affairs and Emigration Badr Abdelatty hosted in Cairo a conference that included representatives from the United Nations, the African Union, the Arab League, the European Union, and several key countries involved in the Sudan issue to try to advance a resolution. Abdelatty reaffirmed Egypt’s commitment to cooperating with all parties to stop the bloodshed in Sudan and stressed that any genuine political solution must be based on a Sudanese vision without external interference and facilitated by international and regional institutions.

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