Egyptian army tanks on the Rafah border crossing with the Gaza Strip on September 9, 2024. Such a show inspired chest-beating patriotism on social media. AFP
Egyptian army tanks on the Rafah border crossing with the Gaza Strip on September 9, 2024. Such a show inspired chest-beating patriotism on social media. AFP
Egyptian army tanks on the Rafah border crossing with the Gaza Strip on September 9, 2024. Such a show inspired chest-beating patriotism on social media. AFP
Egyptian army tanks on the Rafah border crossing with the Gaza Strip on September 9, 2024. Such a show inspired chest-beating patriotism on social media. AFP

Egypt looks to US to resolve dispute with Israel over Gaza border


Hamza Hendawi
  • English
  • Arabic

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Egypt is seeking US intervention to resolve its dispute with Israel over the presence of Israeli troops in the corridor of land that runs the length of the Egypt-Gaza border, analysts and sources told The National.

They said Cairo has made several presentations to senior officials from President Joe Biden's administration in recent weeks, explaining in detail the impact of Israel's capture in May of the Palestinian side of the 14-kilometre-long Gaza-Egypt border, which includes the Rafah border crossing.

Egypt's recourse to the Americans, the analysts and sources say, is in large part a response to the limited options available to Cairo to persuade the Israelis to withdraw from what is known as the Salah Al Din corridor, called the Philadelphi corridor by Israel.

It also reflects a reluctance to escalate the dispute with measures such as suspending its 1979 peace treaty with Israel or recalling its ambassador.

“Egypt does not have much in the way of recourse and Israel is not going to leave the area anytime soon,” said Michael Hanna, director of the US programme at the International Crisis Group think tank. “Diplomatic retaliation remains an option, but Egypt is loath to take that step.”

He said that the approach to the US comes at a time of heightened co-operation between Cairo and Washington towards efforts to bring about a ceasefire in the Gaza war.

“Relations between the United States and Egypt are in pretty good shape now with lots of engagement and co-operation. They are effectively on the same page,” Mr Hanna said.

“The US does not want to see a permanent occupation by Israel of the border area, but is hesitant to take action. Egypt, for its part, will be leaning harder on Washington to do so.”

However, Mr Biden's administration has been largely ineffective in its efforts to influence Israel on issues relating to the Gaza war. These include calls for Israel to exercise more flexibility in the ceasefire negotiations, drop its insistence on a postwar military presence in Gaza, and to take care to protect the lives of Palestinian civilians there. Nevertheless, Washington has continued to supply Israel with arms while expressing unwavering support for its right to defend itself.

In an effort to break the deadlock over the border, Egypt has suggested to Israel an international force in the corridor, including US personnel. Israel has rejected the proposal, according to the sources, who have knowledge of the negotiations as well as the months-long efforts to bring about a Gaza ceasefire and the release of hostages held by Hamas.

Egypt's close ties with the US date to the 1970s, when Cairo broke away from 20 years of alliance with the Soviet Union. Their relations have had some rocky patches, mostly over Egypt's human rights record or foreign policy, but security co-operation and US military and economic aid to Egypt never ceased.

However, the 11-month Gaza war has brought the two closer than at any time in many years. Both nations, together with Qatar, another close US ally, have been mediating between Israel and Hamas to pause the conflict and secure the release of the hostages.

Egyptian President Abdel Fattah El Sisi and Mr Biden have spoken at least half a dozen times since the war began last October. US Secretary of State Antony Blinken has met Mr El Sisi during most of his nine Middle East visits since then.

Mr El Sisi has also had numerous meetings with CIA director William Burns, Mr Biden's National Security Adviser Jake Sullivan and with the White House's Middle East and North Africa Co-ordinator Brett McGurk, some of which were not made public.

The Egypt-Israeli dispute over the Salah Al Din corridor has become one of the main stumbling blocks to reaching a ceasefire.

Israeli Prime Minister Benjamin Netanyahu insists that keeping troops there is necessary to prevent Hamas form rearming through underground tunnels linking Gaza to Egypt. Cairo says its military destroyed the tunnels nearly a decade ago.

The Egyptian side of the Rafah border crossing with the Gaza Strip on September 9, 2024. AFP
The Egyptian side of the Rafah border crossing with the Gaza Strip on September 9, 2024. AFP

Egypt regards the Israeli occupation of the corridor as breaking an accord signed in 2005 that prohibits the presence of troops and heavy weapons in the area. It also insists that the Gaza side of the Rafah crossing must be run by Palestinians, although not necessarily Hamas.

The dispute has plunged Egypt-Israel relations to what is widely viewed as their lowest ebb since their milestone, US-sponsored peace treaty 45 years ago.

Mr El Sisi, the sources said, has for months refused to take any phone calls from Mr Netanyahu. The state-controlled media in Egypt has been whipping up anti-Israel sentiment over its war in Gaza. Talk show hosts accuse Mr Netanyahu of genocide against Gaza's Palestinians and prolonging the war to ensure his political survival.

The tense relations between the former foes are perpetuated in part by the enduring popular perception in Egypt of Israel as the nation's No 1 enemy, five decades after the last of their four, full-fledged wars in 1973. Fighting wars in the mostly desert Sinai Peninsula – the battlefield of all four wars against Israel – remains at the heart of the doctrine of the Egyptian military to this day.

Israeli Prime Minister Benjamin Netanyahu stands before a map of the Gaza Strip during a televised address on September 2 to explain why Israel must retain control over the Gaza's border with Egypt. AP
Israeli Prime Minister Benjamin Netanyahu stands before a map of the Gaza Strip during a televised address on September 2 to explain why Israel must retain control over the Gaza's border with Egypt. AP

A heavily publicised visit to the Gaza border by Egypt's Chief of Staff Gen Ahmed Khalifa last week demonstrated the schism between the two nations. The army released video of columns of armoured vehicles and light tanks a short distance from the border.

Other segments of the five-minute clip showed Gen Khalifa surrounded by commandos in full combat gear as they walked along the border fence.

The presence of tanks and commandos in an area where only lightly armed border guards are supposed to be allowed, under the provisions of the 2005 accord, constituted a clear message to Israel, the sources said.

Many Egyptians took to social media to declare the death of the 1979 peace treaty, egging their military to drive out the Israelis from the Salah Al Din corridor.

Pro-government talk show hosts and their guests feasted on the significance of Gen Khalifa's September 5 visit, explaining at length the “messages” it sent to the Israelis, but they also went out of their way to discredit any thought that the two nations were inching closer to war.

Instead, they sent a unified message to the millions of local viewers that Egypt, while not spoiling for a fight, wanted to show its eastern neighbour it was fully prepared for any eventuality.

Egypt's chief of staff Gen Ahmed Khalifa inspects the border area with Gaza on September 5, 2024. Photo: Egyptian Armed Forces
Egypt's chief of staff Gen Ahmed Khalifa inspects the border area with Gaza on September 5, 2024. Photo: Egyptian Armed Forces

Moreover, the visit and the intense publicity surrounding it were meant to reassure Egyptians of the preparedness of the military. “No one dares to come near us and threaten our territory. Not Israel or anyone else,” said Ahmed Mousa, one the most staunchpro-government television hosts.

“Don't follow those who are trying to escalate the situation,” said Mohammed El Ghabary, a retired army general who lectures at the Nasser Military Academy. “Neither us nor Israel will gain from an escalation.”

Another military expert, retired brigadier general Sameer Ragheb, also sought to rule out an outbreak of hostilities to settle the dispute over the Gaza border.

“Egypt is bound by the choice of peace,” he said, alluding to the 1979 peace treaty with Israel. “We say this out loud because we are an honourable and truthful nation.”

The narrator of the border visit video had a similarly assuring message, albeit delivered with the tone of absolute certainty typical of the military's media productions.

“The main mission of the armed forces is to safeguard the nation's borders … the armed forces are capable of defending those borders,” he said as a soundtrack of patriotic music grew louder.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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