The Israel-Palestine issue resulted in complex and multiple responses from Egypt. The peace treaty between Israel and Egypt has survived for many years, yet the Egyptian government now demonstrates open pledges of assistance to the Palestinian people who live in Gaza. The Egyptian government serves as an essential peace broker between Israel and Hamas while developing a complete Gaza rehabilitation strategy that emphasizes Palestinian government restoration, neighborhood stability, and humanitarian help without requiring Palestinian relocation. To rebuild Gaza and achieve peace with security, Arab nations support this specific plan that discards Palestinian relocation from Gaza or elsewhere.
The security hazard, combined with complicated ties between Israel and Palestinian factions, has caused Egypt to maintain its current blockade against Gaza since Hamas won control in 2007. The Egyptian government asks Israel to end fighting while withdrawing from Gaza territory, while most Egyptians stand with Palestinians in their conflict. The Egyptian government uses ceasefire negotiations to urge Hamas to eliminate its armed forces while seeking governance control through a technocratic Palestinian government it supervises.
Historical background of Egypt with the Israel-Palestine conflict
Post the 1948 Arab-Israeli War, Egypt emerged as a prominent advocate of the Palestinian case, including military actions against Israel and the financial and political backing of the Palestinian Liberation Organization (PLO). Egypt was able to establish its dominant location in the Arab world by continuing to pursue the Palestinian conflict. President Anwar Sadat took a turn in history and signed the Egypt-Israel Peace Treaty in 1979, being the first formal partner between Arab and Israeli countries. To many Arabs, Sadat’s signing was a betrayal of the Palestinian people and resulted in the Egyptian’s suspension from the Arab League for ten years.
Through the Camp David Accords, Egypt ended its direct Palestinian involvement by obtaining mediator status while the Egyptian-Israeli peace operation became independent from Arab-Israeli disagreements.
During Hosni Mubarak’s presidency, Egypt and Israel maintained a distant, peaceful relationship from 1981 to 2011, although they upheld their treaty agreement. The Fatah-Hamas split of 2007 made Egypt a fundamental broker between Israel and Palestine during their negotiations and within Palestinian unity attempts.
The 2011 revolution led to political chaos and uncertainty for Egyptian society. The short presidency of Mohammed Morsi (Muslim Brotherhood) caused a shift within the Egyptian discourse towards more support for Palestinians, mainly Hamas, yet certain fundamental policies that were observed regarding Israel, like endorsing the peace agreement, have not changed.
The new Egyptian political leadership of President Abdel Fattah el-Sisi has treated Hamas indifferently while formalizing and intensifying the Israeli security relationship regarding Sinai and has followed up with Gaza’s blockade after Morsi was deposed.
Egypt has escalated its public denunciations of Israeli military action since the start of 2021, especially during the 2023 Gaza War, while trying to prevent Palestinian displacement into Sinai. For the sake of national security while maintaining the peace treaty, Egypt has increased its diplomatic efforts by negotiating terms for a truce as well as negotiating for Gaza’s reconstruction. Public opinion, combined with hopes for regional leadership, manifests as increased criticism against Israeli policy through government statements and mass media.
Egypt’s Gaza red lines
Egypt has placed stopping Palestinian population movements into Sinai as its leading objective since Israel initiated aerial assaults on Gaza shortly following the Hamas assault of October 7, 2023. From the start, Cairo feared that Israel would bomb civilians indiscriminately with heavy weapons to force Gaza residents out or create evacuation pressures.
The fear of Palestinian displacement from the Gaza Strip was amplified during the early stages of the conflict when Israeli politicians from the present and past have asked for Palestinian removal from the Gaza Strip. In mid-October, Western countries and the United States officially opposed population displacement, which provided reassurance to Egyptian government officials. The breakdown of ceasefire negotiations in March and April restored their sense of worry to the Egyptian authorities.
President Sisi, along with other Egyptian leaders, has repeatedly declared that this action would never be allowed. The Egyptian reaction to border infringement has not been specified, but diplomatic ties between Egypt and Israel would probably worsen. Several Egyptian diplomatic officials expressed thoughts that Egypt could suspend the 1979 peace treaty with Israel, which had been maintaining peace between Egypt and Israel since 1979.
Egypt bases its stance on theoretical concepts. The Egyptian administration wants to prevent others from viewing their actions as assisting Palestinian demise in political power, along with their national liberation movement.
Economic lifeline for Egypt under the Palestine and Israel conflict
Egypt faces strong financial pressure from the present Israel-Palestine confrontation, yet possesses new economic prospects through mediation efforts in the area.
1. Economic challenges
The pre-existing economic difficulties of Egypt have worsened because of these turbulent times. The Suez Canal has faced its worst economic decline because it represents 12% of global trading routes and provides essential foreign currency income. The conflicts and Houthi militant activities in Yemen resulted in Suez Canal revenue losses exceeding 60 percent, which amounted to about $7 billion for Egypt in 2024. Egypt’s budget, alongside its foreign exchange reserves, faces severe damage from this disruption, while vessel shipping rates across the world become more expensive.
The tourism industry of Egypt has faced consequences from unstable regional conditions since most of the region’s tourists hail from Israel. Defense requirements have compelled Egypt to boost its military spending, thus adding more to its financial resources.
2. Geopolitical and security risks
Security worries persist across two domains because Egypt faces border threats from Gaza and Palestinian combatants crossing into Sinai, thus raising its defense challenges. Israel’s proximity to Rafah makes it difficult for Egypt to maintain its strategic advantages and raises internal instability for the country. These elements make Egypt’s social unrest and economic instability worse.
3. Possibilities through mediation and rehabilitation
Egypt has emerged as a major force working on Gaza’s reconstruction, which demands $53 billion over five years. The close regional position in combination with reconstructive project experience will enable Egypt to secure major construction and building materials contracts. The reconstruction trust fund for Gaza will be launched at an international conference in Cairo, where Egypt will show its leadership in cooperating on humanitarian and development projects alongside China and Qatar.
4. International assistance and economic sturdiness
To mitigate the economic impact, Egypt has gotten significant financial support from the Gulf nations, the IMF, the World Bank, and the EU.
Egypt’s support for Israel or Palestine?
Egypt bears substantial economic damage because of the Israel-Palestine conflict, and above all because of the Gaza war, which reduces Suez Canal income and disrupts trade and tourism and requires higher safety measures. The financial benefits Egypt acquires through its mediation work and its important role in Gaza’s reconstruction efforts partially counterbalance financial losses. Permanent ceasefires and regional security remain essential to nationwide progress because they will enable reconstruction operations and the flow of trade and bolster investor confidence.
