Hamas’s surprise attack on Oct. 7, 2023, ushered in a new era of instability for Israel’s regional relationships. While international attention has understandably focused on Gaza itself, the aftershocks have extended far beyond its borders. This is particularly true for Egypt, Israel’s most important Arab neighbor and a critical partner since the signing of the Camp David Accords in 1978-1979.
In the nearly two years since the Israel-Hamas war began, Israeli decisions have strained bilateral ties with Cairo. This growing friction not only jeopardizes a pillar of Israel’s regional security but also undermines its broader strategic position in the Middle East. On the eve of its anticipated military operation in Gaza City, Israel must recalibrate its approach to Egypt before it causes permanent damage to a cold but functional peace.
From the war’s outset, Egypt saw an Israeli invasion of Gaza as a direct threat to its national security. Repeated Israeli efforts—sometimes veiled, sometimes overt—to pressure Cairo into accepting Palestinians from Gaza into Sinai were consistently met with Egyptian resistance. Egyptian President Abdel Fattah al-Sisi, who shares no love for Hamas, made it clear that taking part in the forced displacement of Palestinian refugees would constitute a red line, fueling domestic instability and undermining Egypt’s long-standing claim of defending Palestinian rights.
Egypt has also tried to build consensus in the Arab world around alternative “day after” plans for Gaza that would empower a technocratic Palestinian administration. Israel’s persistent promotion of “voluntary migration” alongside the Trump administration’s Gaza “Riviera” plan has therefore been interpreted in Cairo not simply as tone-deaf, but also as an intentional provocation that threatens regime stability. It is not coincidental that Sisi has yet to visit the White House during Trump’s second term.
The war has also come at a heavy cost for Egypt. Tourism has suffered while Houthi attacks have also redirected global shipping lanes away from the Suez Canal, another critical revenue source for Cairo. There have also been periodic suspensions of the flow of Israeli natural gas. These have damaged Egypt’s access to foreign currency and amplified chronic issues of inflation, thereby widening the country’s fiscal gaps and exacerbating its overdependence on international loans.
In addition to these existing challenges, Egypt is also concerned about the economic impact of the proposed India-Middle East-Europe Economic Corridor, which—by creating alternative regional trade routes through Israel and Jordan—could leave Egypt high and dry.
Israel’s military takeover of the Rafah border crossing between Egypt and Gaza in May 2024 and its continued operations along the Philadelphi Corridor created some of the sharpest crises in relations in decades. From Cairo’s perspective, these moves violated elements of the Camp David Accords and challenged Egyptian sovereignty in Sinai. Egypt responded by closing the Rafah crossing, halting cooperation on aid flows, and hardening its rhetoric toward Israel. During this period, U.S. mediation was critical both in enabling the continued flow of aid and ensuring that Israeli and Egyptian officials maintained lines of communication.
Most recently, as it inches toward a full-scale military operation in Gaza City, Israel has hinted at threatening its economic relationship with Egypt as a way to secure cooperation from Cairo. Israeli Prime Minister Benjamin Netanyahu and Energy Minister Eli Cohen reportedly intend to examine the $35 billion natural gas export agreement recently signed with Egypt by the partners involved in the Mediterranean Sea’s Leviathan gas field (including U.S. supermajor Chevron). According to Israel Hayom, this occurred “against the backdrop of reports in the media that Egypt is violating the peace agreement with Israel.” These statements reflect a broader trend of senior Israeli officials increasingly casting doubts on Egypt’s reliability as a partner and its commitment to the Camp David Accords.
These actions risk sending Israel’s already-strained relations with Egypt into a full tailspin, endangering the anchor to Israel’s entire regional security architecture.
Egypt was the first Arab country to sign a peace treaty with Israel, under which it has maintained quiet along their common border for more than four decades. This sense of stability allowed Israel to focus resources on other threats, from Hezbollah in Lebanon to Iran’s activities across the region. There is no question that Egypt, through its appeasement of Hamas, has not been an ideal neighbor, and Cairo bears its own share of responsibility for the conditions that led to the Oct. 7 attacks. But undermining the Camp David Accords risks reintroducing strategic uncertainty to Israel’s southern border, an unnecessary burden atop the Israeli military’s expansive list of responsibilities.
Egypt remains a key broker in Arab diplomacy. Its mediation role with Hamas and other Palestinian factions has been imperfect but indispensable. Alienating Cairo weakens Israel’s ability to succeed in future hostage and cease-fire negotiations as well as regional diplomacy more broadly.
Furthermore, Arab states considering normalization with Israel—most notably, Saudi Arabia—closely monitor how Israel treats its current regional partners. If relations with Egypt deteriorate further, others will conclude that Israeli commitments are unreliable.
This also extends to economic cooperation, where—in an era of boycott and divestment—Cairo has actually doubled down on its commitment to importing Israeli natural gas. Cynics would point to Egypt’s acute energy shortages as evidence that the recent agreements only reflect a narrow set of interests. But the Leviathan and Tamar natural gas fields are, in fact, strategic assets that tie Israel not only to Egypt but also into regional energy markets. Turning them into bargaining chips may offer short-term leverage, but the strategy will ultimately corrode the long-term trust necessary for energy cooperation and accelerate Cairo’s ongoing search for additional natural gas suppliers.
Energy cooperation establishes mutual dependence. Just as an Israeli threat to turn off the tap would harm the Egyptian regime, if Egypt succeeded in diversifying away from Israeli gas, then Israel would lose both economic revenue and regional connectivity. As Chevron’s president for global gas commented in early September, “Egypt needs all the gas it can get.”
Egypt, for its part, has taken many steps that have strained the relationship. Starting this spring, it has frozen ambassadorial exchanges, declining to approve Israel’s new envoy to Cairo and withholding its own ambassadorial appointment to Israel. Egypt also joined South Africa’s genocide case against Israel at the International Court of Justice in 2024.
But during a period when Israel is becoming increasingly isolated in the international arena, it is noteworthy that, amid the vicissitudes of war, Egypt has managed to balance its economic and security cooperation with Israel on one hand and its opposition to Israeli policy on the other. This may be the greatest proof that Egypt sees its fate tied to the Camp David Accords and fears the prospect of the peace treaty’s collapse.
The alternative is concerning. If it genuinely wanted to harm Israeli national security interests without raising international alarm bells, then Egypt could simply relax its security cooperation with Israel. This would harm Israel’s strategic depth on its southern front and expose its 206 kilometer (128 mile) border with Egypt to potential threats.
In conclusion, while the peace treaty remains intact, the fabric that sustained the Camp David Accords since 1979 is fraying, and there is an absence of mutual trust. If Israel pushes too far, then it won’t only risk the bilateral relationship but also harm the Egyptian regime. Instead, Israel needs to recalibrate: to stop pressing Egypt on the Gaza relocation issue, reach mutually agreeable terms regarding security control along the Egypt-Gaza border, safeguard energy cooperation, and empower Egypt’s ongoing mediation role rather than undermining it. Reestablishing trust with Cairo would also signal to other regional actors that Israel is capable of compromise and restraint.
There is also a role here for third parties as well. Most important is the United States, which both brokered the Camp David Accords and has been the primary mediator between Israel and Egypt in the decades since. But European and Arab neighbors, which share a common interest in strong Israeli-Egyptian ties, should also help.
This starts with conveying clear signals of support for the Egyptian regime. It also involves pivoting away from the Gaza Riviera fantasy, seriously addressing Egypt’s proposed “day after” plan for Gaza, and pursuing back-channel efforts to bridge the security gaps between Israel and Egypt.
Israel’s peace with Egypt is not a relic of the past but a living, evolving linchpin in Israel’s regional security. Strong ties with Egypt strengthen Israel’s economy, mitigate Israel’s diplomatic isolation, and bolster Israel’s defense. Squandering them would be a historic mistake.
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