Egypt faces identity crisis in new relationship with Israel

After 7,000 years of recorded history, Egypt is facing an identity crisis. In his rush to reshape Middle East history and forge a new era between the Arabs and Israel, President Anwar Sadat has wrenched Egypt away from the political and economic credos by which it has lived since independence.But the new doctrines have not yet taken clear shape.

Is Egypt Arab or Pharaonic? Pro-Israel or anti-Israel? Socialist or capitalist? Military defender of the Arabs or anti-communist policeman for the West?

"The issue here is our basic identity," one Egyptian intellectual complained, "and until these issues are resolved, everything seems very temporary and somewhat threatening."

Under the late President Gamal Abdel Nasser, Egypt's identity was planted squarely in the center of the Arab world. As acknowledged leader of the Arabs, its Army knew its role -- as the crucial element in any battle against Israel. Although never strongly pro-communist, Egypt looked to the Eastern bloc as defender of third-world nationalist movements. Its economy, although never collectivized, stressed the public sector to the almost total exclusion of private enterprise.

President Sadat, never one for the small gesture, has turned this comfortable , though stagnant, posture on its head. When the Arab world failed to follow his peacemaking gesture toward Israel, he cut off diplomatic ties and stressed Egypt's Pharaonic heritage. Aware that Egypt's future depended on resuscitating its ravaged economy, he sought to substitute local and foreign-financed private enterprise for Egypt's moribund public sector. Wary of Soviet expansion in the Mideast, he sought to convince the United States that as an ally he could better guarantee the region's stability than Israel.

But such a 180-degree turn, although several years in the making, has led to the Egyptian people psychologically gasping to catch up. Most difficult for them to grasp is their new position within the Arab world. Many Egyptians feel isolated at no longer being the political and cultural center of the Arab compass.

While resentful of their former dependence on Arab oil wealth, most recognize that it is impossible to cut their Arab ties totally. Egypt's economy depends on the Arab world as an outlet for its unemployed and a source of billions of dollars in workers' remittances.

But Egyptians are confused by their awkward limbo between the Arab world and Israel. One Egyptian recently spent two hours waiting at Cairo airport for the Egyptian intelligence police to clear a Jordanian colleague through passport control --whisked through without question.

"Isn't there something strange," he asked in genuine perplexity, "when Egypt is Israel's only friend in the area and an enemy to all our fellow Arabs."

Although President Sadat's peace efforts still have the support of the vast majority of his people, they are far more ambivalent about Egypt's proper relationship with the state of israel. Attitudes have soured after months of stalled talks over Palestinian t erritories occupied by Israel.