TEL AVIV -- Israel celebrates its 64th year of independence Thursday greatly satisfied with its political stability and achievements in many fields. But Israel is also looking beyond scheduled June presidential elections in Egypt and wondering what its future relations will be with an Egypt dominated by the Muslim Brotherhood.
Israel received an advance warning this week with Egypt's one-sided abrogation of its 2005 gas deal under which Cairo undertook to supply Israel with gas for 15 years at a fixed price, not withstanding changes in the world market.
Israel received the news with a relative calm because it expected such a move and because it expects to exploit its own gas from newly discovered gas fields in the Mediterranean next year.
There could be truth in Egypt's claim that its scrapping of the gas deal was "purely commercial" and has nothing to do with its peace treaty with Israel.
The deal came under fire shortly after the overthrow of President Hosni Mubarak in February 2011. It was argued Hussein Salem, a close confidant of Mubarak and a senior partner in the joint Israeli-Egyptian gas company, was instrumental in signing the deal with Israel. The Muslim Brotherhood accused Salem of selling gas to Israel at below-market prices and that he had skimmed millions of dollars off the proceeds. Salem fled Egypt for Spain immediately after Mubarak's overthrow and was sentenced in absentia to seven years in jail.
Under the 2005 deal, Egypt was to sell Israel 1.7 billion cubic meters of gas annually at a fixed price. At one point, a former head of the Mossad was hired by the Israeli company to close the deal with Omar Suleiman, who was at the time the head of the Egyptian secret services. Some Israeli observers believe Suleiman's involvement in the gas deal with Israel was among the reasons that led to the scrapping of his bid to become president of Egypt.
Is there a chance that the gas deal could still be saved and renegotiated? Such a possibility should not be discarded. Jordan, which also bought its gas from Egypt, renegotiated its contract and paid the Egyptian government a considerably higher price.
Egypt offered the same thing to Israel but the Israeli company rejected the offer. This definitely was a short-sighted decision. Any new contract will be negotiated under much tougher conditions.
Immediately after the abrogation of the gas deal, senior Egyptian officials sought to reassure Israel the motivation was purely commercial and had nothing to do with the 1979 Egyptian-Israeli peace treaty.
Israel wants to believe this is true. In practice, however, it makes no difference. Since the downfall of Mubarak, the peace with Israel exists only on paper. After the attack on its embassy and the evacuation of its personnel following an American intervention, Israel is still unable to find a new location for its embassy in Cairo. The Israeli ambassador works from home and the embassy staff has been considerably reduced. There are no meaningful contacts between the embassy and any Egyptian agency.
Both Egypt and Israel are waiting for the end of the transition period and the election of a new Egyptian president to determine how relations will develop. On the Israeli side, there are not many expectations. The Muslim Brotherhood, which has become the dominant force in post-Mubarak Egypt, has declared many times in the past that it will continue to honour Egypt's peace treaty with Israel. But even now, under the transition rule of Marshal Hassan Tantawi, relations between the two countries are limited to the security field, especially in Sinai. Israel cannot ignore the fact that, under the present government, the gas pipeline to Israel in Sinai was blown up 14 times.
Israel is very concerned about the co-operation between the Bedouins in Sinai and various terrorist organizations. Israel is building a fence along the Egyptian border and redeployed additional forces to that section. The Egyptian military government appears to be sincere in its desire to keep the border with Israel quiet. Will it be the same under the next government? We'll wait and see.
Samuel Segev is Middle East correspondent for the Free Press.