Yet Egyptian-Israeli relations are a function not only of Palestinian-Israeli, or even Arab-Israeli relations. The domestic economic and political situation in Egypt plays its part. It is not a coincidence that Egyptian-Israeli relations have deteriorated at times of declining Egyptian economic fortunes. Following a growth rate of 5-6 percent in the second half of the 1990s, the Egyptian economy went through a recession that dropped the rate of growth to about 2.5 percent in the first three years of the new century. With a population growth rate of about 2 percent, Egypt was effectively not growing at all.
Part of this downturn in the Egyptian economy can be attributed to the regional instability generated by the Palestinian-Israeli confrontation. But by mid-2004, Egypt was about to review its reform policies, and with a new cabinet formed last July geo-economic concerns overtook geopolitical ones. The official Egyptian justification to the Egyptian public for signing the Qualified Industrial Zones deal with Israel was that the agreement contributed beneficially to Egypt's economy, particularly the reduction of unemployment. The deal to release Israeli prisoner Azzam Azzam was necessary to open the way for further relaxation of the regional situation, and to make further deals in trade and gas possible.
It is also essential, however, to see Egyptian moves toward Israel as a part of the Egyptian regional posture in 2004. For Egypt, the U.S. war in Iraq and its consequences in terms of the insurgency, the Israeli-Palestinian conflict, and the continuation of the civil war in Sudan - all have destabilized the Middle East. The "swamps" of terrorism in the region have been expanding, and radical forces in Iran and elsewhere have been boosted.
An unstable Middle East is not an environment in which Egyptian national interests are served. Creating stability has been the traditional business of Egypt during the past three decades. That is why last year Egypt moved to help the Americans in Iraq by hosting a conference on Iraq at Sharm el-Sheikh, which legitimized the U.S. presence. Cairo also moved to support the peace process in Sudan through to its conclusion on Jan. 9. Ultimately, however, Egypt will continue to regard Israeli-Arab peace as the cornerstone of regional stability.
I think that this interpretation suggests that Egyptian-Israeli relations are going to continue to be a cornerstone of US policy in the Middle East, but even more so. With the Bush administration's policy, Egypt has a lot less wiggle room to keep its distance from Israel (but Israel continues to have virtually no constraints on its actions, even if they disturb Egypt). What Egypt gets from the deal on top of the economic advantages mentioned above (which I don't believe are as crucial as Said makes them out to be) is an implicit commitment from the US that regime change (soft or hard) won't be on the cards for Cairo. But really, considered from a strictly strategic point of view, this has basically changed the regional balance to leave much, much less power and maneuvering room for the Egyptians -- and no hard and fast guarantees that next time around they won't be forced to do something even more difficult.
Egyptian foreign policy (and domestic) under Mubarak has been status-quo oriented -- the key quote of the article is "Creating stability has been the traditional business of Egypt during the past three decades." But what Egypt needs, really, is a pro-active foreign policy that takes a few risks for the possibility of much greater returns than they would get by waiting for events to impose situations on them. Say what you want about Sadat, but the man at least was daring enough to create new possibilities by sheer statesmanship (he also was more courageous with domestic policy -- in good and bad ways.) The situation Egypt now finds itself in -- a soi-disant regional power with actually very limited influence that has to troubleshoot or the US and Israel -- is unbecoming for a country of its potential. And you know who you have to blame for that: the man that allowed Egypt to be driven into a strategic corner because all he cared about was his political survival.