Egypt, Israel seize chance for thaw

Sunday's swap of an Israeli spy for Egyptian students is indicative of a post-Arafat thaw in a key Middle East relationship.

As Israeli citizen Azzam Azzam headed home Sunday after eight years in an Egyptian prison, he shouted: "I am born again."

At the same time, traditionally chilly relations between the two countries are also experiencing a measured rejuvenation.

In exchange for freeing Mr. Azzam, who was convicted of spying against Egypt, Israel freed six Egyptian student infiltrators it has been holding since last summer, alleging they planned to hijack a tank.

Israeli analysts say that the passing of Palestinian leader Yasser Arafat, the reelection of President Bush, and the prospect of Israel dismantling settlements are creating a perception, shared by Egypt, that this is a moment of opportunity in the region.

"It's a certain moment when things are coming together, where the idea of breaking the violent stalemate of the last four years is seen as a possibility and everyone desires to make sure that the moment isn't missed," says Bruce Maddy-Weitzman, a historian at Tel Aviv University.

Israel had always denied that Azzam, sentenced to 15 years, was a spy. His continued incarceration, despite repeated pleas for clemency to President Hosni Mubarak, came to symbolize the cold peace between the two countries, which signed a treaty in 1979. Relations became even worse after the outbreak of the Palestinian uprising in 2000, when Egypt recalled its ambassador to protest army actions against the Palestinians.

But lately, the tone and to some extent the substance of relations has changed markedly, with Egypt apparently realizing it needs a working relationship with Prime Minister Ariel Sharon in order to play a regional leadership role and impress Washington.

"Don't forget that from time to time the Israeli side complains to the Americans that Egypt doesn't play an active role in controlling the smuggling of arms,'' says Emad Gad, an expert on the Palestinian-Israeli conflict at the Al Ahram Center for Political and Strategic Studies in Cairo. "The Egyptians want to convince America that Egypt will control its borders and that Egypt is a peace partner that the US can depend on as a regional ally."

Last week, President Hosni Mubarak, in comments made after his foreign minister, Ahmed Abu Gheit, returned from talks with Mr. Sharon, went so far as to say that the Israeli prime minister offers the best hope to Palestinians of progress toward a state. "He is capable of pursuing peace, and he is capable of reaching solutions if he wants to," Mubarak said.

Thanking Mubarak for Azzam's release, Sharon said, according to his office, that the two men "will be able to reach great achievements for future generations." His office added that Sharon had agreed to consider early releases of some Palestinian prisoners.

Beyond the lofty rhetoric, a common interest in ensuring a smooth Israeli withdrawal from Gaza is bringing the two countries together now. Other signs of warming: The unprecedented Israeli leadership of rescue efforts on Egyptian soil after an October terrorist bombing in Taba and a surprisingly muted Egyptian response to the Nov. 18 killings of three Egyptian border guards by Israeli soldiers.

Those killings, an apparent case of mistaken identity, only briefly postponed a trip to Israel by Mr. Abu Gheit and intelligence chief Omar Suleiman. In the past, the killings would have typically led to a war of words. But this time, within a week, the Egyptian officials were sitting down with the Israelis to discuss closer border security and securing Gaza after the pullout.

Egyptian and Israeli analysts say there's a limit to how far this will go. While there's an alignment of interests over Gaza, the backdrop of historic enmity and mistrust remains and is likely to persist at least until a peace that is perceived as fair is reached between Israel and the Palestinians, they say.

From the Egyptian side, the motivation comes from money and prestige. Money, because of the $2 billion per year that the US has provided to Egypt since it signed its peace agreement with Israel; prestige because Egypt would like to regain its historical role as a major player in the Arab world. Taking leadership in engaging both the Palestinians and Israelis is most likely its best way to do so.

The new ties are also coming at very little cost to Egypt. While they might be unpopular with the average Egyptian, the regime is fairly well insulated from public opinion. And Egypt may be betting that good-faith efforts at closer ties with Israel will help in improving Egypt's relationship with the US, particularly in negotiations to give Egyptian products preferential access to US markets.

Analysts say by deepening ties with Israel, Egypt can also deepen ties and diplomatic leverage with the US. "The Egyptians may have to call in a favor down the road, and if they deepen their security ties with Israel ... this will speed up and facilitate things in Washington," says Josh Stacher, who is writing his PhD thesis on Egyptian politics. "This probably goes beyond the realm of just security - the new mantra in Egypt is economic reform over political reform."

Mr. Stacher says that with an older Mubarak, the Egyptian state is looking to ease US calls for comprehensive political reform here, arguing instead that most of its efforts should be focused on the economy. One way to get US support for its efforts is to engage with Israel and the Palestinians.

In the short term, Egypt is hoping to get US approval for Qualified Industrial Zones with Egypt that would provide low-tariff access to the US for certain Egyptian goods, provided that they're produced with a proportion of Israeli raw materials.

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