Police presence on the Egyptian side of the Rafah border crossing between Egypt and the Gaza Strip. EPA
Police presence on the Egyptian side of the Rafah border crossing between Egypt and the Gaza Strip. EPA
Police presence on the Egyptian side of the Rafah border crossing between Egypt and the Gaza Strip. EPA
Police presence on the Egyptian side of the Rafah border crossing between Egypt and the Gaza Strip. EPA

Egypt's relations with Israel hit a dangerous low over plans for post-war Gaza


Hamza Hendawi
  • English
  • Arabic

Israel's swift rejection of the Egyptian plan endorsed this week by Arab leaders for the reconstruction and political future of Gaza has taken relations between the two neighbours to a dangerous low, but analysts believe the prospect of the pair tearing up their 1979 peace treaty or going to war remains slim.

Egypt's criticism of Israel, already scathing since the start of the Gaza war, has been intensifying. Egyptian troops in the Sinai Peninsula, the theatre of operations in the four full-fledged wars between the two nations, have been significantly reinforced, sources say. They have staged several demonstrations of power with large-scale, live-fire war drills in the arid and mostly desert region.

Officials and pro-government media have meanwhile been employing anti-Israeli rhetoric that harks back to the years of unfettered enmity between the two countries before they signed the US-sponsored peace treaty.

The treaty has for decades been seen as a cornerstone of regional stability and a model for others in the Middle East to follow. However, it has appeared to be on the brink of unravelling at multiple points since the start of the Gaza war in October 2023, with Cairo routinely levelling serious accusations against Israel.

A drone view shows the extent of destruction by the Israeli army in Beit Hanoun in the northern Gaza Strip. Reuters
A drone view shows the extent of destruction by the Israeli army in Beit Hanoun in the northern Gaza Strip. Reuters

Egyptian leaders from President Abdel Fattah El Sisi down to cabinet ministers, diplomats and politicians, have accused Israel of aiming to make Gaza uninhabitable through scorched-earth tactics, using hunger as a weapon and coercing Palestinians into leaving their ancestral lands.

In a thinly-veiled warning over the fate of the treaty, Mr El Sisi told Arab leaders gathered in Egypt on Tuesday that the historic accord provides for a legal commitment against creating conditions conducive to the Palestinians leaving their lands to resettle elsewhere.

“It's a violation of that commitment to respect the sanctity of safe borders,” he said, alluding to Israel's warm welcome of US President Donald Trump's plan to resettle Gaza's Palestinians in Egypt and Jordan while the US takes over the coastal territory and turns it into a glitzy beach resort.

“The Egypt that pioneered peace in our region some 50 years ago and honoured and protected it only knows the kind of peace that's based on right and justice and safeguards the land and sovereignty.”

While Mr El Sisi's warning remained rooted within the parameters of diplomatic language, the pro-government media in Egypt has gone way beyond that in recent days, threatening Israel with a harsh military response if it breaches Egypt's territorial sovereignty.

Comments made this week by Israel's defence minister warning Egypt against violating the peace treaty only fuelled the anti-Israeli content in the government-controlled media in Egypt.

File Photo: Israeli Prime Minister Benjamin Netanyahu. AP
File Photo: Israeli Prime Minister Benjamin Netanyahu. AP

However, the analysts believe Egypt and Israel will neither go to war over Gaza – they already fought four wars between 1948 and 1973 – nor scrap the peace treaty.

“The treaty is durable but what exists now between Egypt and Israel is a very cold peace. It's a peace between the security elites in both countries, not people-to-people peace,” said Michael Hanna, a prominent New York-based Middle East expert with the International Crisis Group, a global think tank.

“Both sides have since the start of the Gaza war committed technical violations of the treaty but its core has not been touched,” he added.

That cold peace is manifested in a variety of ways.

The Israeli embassy in Cairo has for months had the bare minimum number of diplomats stationed in the Egyptian capital, according to the sources. Mr El Sisi and Israeli Prime Minister Benjamin Netanyahu are not known to have spoken on the phone or in person since the Gaza war began, with the sources saying the Egyptian leader has refused to take Mr Netanyahu's calls on several occasions.

Egypt has also said it was joining South Africa's case before the International Court of Justice that accuses Israel of committing genocide in Gaza.

"Humanity's collective memory will long pause at what happened in Gaza … and how the aggression against Gaza left the history of humanity with a stigma that's headlined with the spread of hatred and the absence of humanity and justice," the Egyptian leader said on Tuesday.

Conceived as a counter to Mr Trump's controversial vision for postwar Gaza, the main feature of Egypt's $53-billion plan is allowing the reconstruction of Gaza to take place while the territory's 2.3 million residents remain there. It also envisages upgrading the capabilities of Gaza's police force and the possibility that Hamas will disarm if there exists a clear path towards a two-state solution to the Palestinian-Israeli conflict.

Egyptian Foreign Minister Badr Abdelatty. Reuters
Egyptian Foreign Minister Badr Abdelatty. Reuters

Shortly after the Arab summit ended on Tuesday, the Israeli foreign ministry rejected the outcome, saying the Arab plan failed to address realities after the Hamas-led attack of October 2023.

“Hamas' brutal terrorist attack, which resulted in thousands of Israeli deaths and hundreds of kidnappings, is not mentioned, nor is there any condemnation of this murderous terrorist entity,” the ministry said.

For its part, the US said the plan failed to address the reality that the enclave is “uninhabitable” and that residents “cannot humanely live in a territory covered in debris and unexploded ordnance”.

Egypt’s Foreign Minister Badr Abdelatty responded to Israel's rejection of the plan with a tirade of accusations, branding its position as “unacceptable” as well as “stubborn and extremist”.

“There will be no peace neither to Israel or to the region” without establishing an independent Palestinian state in accordance with UN resolutions, he said. “Israel violates all international law rules … International law must be imposed. No single state should be allowed to impose its will on the international community.”

A displaced Palestinian woman reads the Quran before breaking fast at the Bureij refugee camp in the central Gaza Strip. AFP
A displaced Palestinian woman reads the Quran before breaking fast at the Bureij refugee camp in the central Gaza Strip. AFP

The analysts, however, believe Washington's rejection of the Egyptian plan is much more consequential than Israel's, with far reaching ramifications on the region.

“The American rejection will inflict serious damage on the already fragile peace prospects," said Marwa Abdel Halim, an expert on US policies with the Egyptian Centre for strategic Studies, a Cairo-based think tank.

“It will shake the United States' relations with its friends in the region and create conditions in the Middle East that will force the Americans to increase the use of its security and military resources to protect its interests in the region,” she said.

President El Sisi, whose country has received billions of dollars' worth of US military and economic aid since the late 1970s, has indefinitely postponed a White House visit scheduled last month after Mr Trump revealed his plan for Gaza, which has been globally and regionally rejected as ethnic cleansing.

However, the Egyptian leader continues to hope that Mr Trump can be persuaded to drop his Gaza plan as well as use his leverage to force the Israelis and Palestinians back to their long-stalled peace talks.

“The ceasefire could not have been realised without the much appreciated efforts of President Donald Trump and his administration, which we hope will continue to sustain the ceasefire in Gaza … and resurrect the hope of Palestinians to have their independent state,” he told this week's Arab summit.

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Who was Alfred Nobel?

The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.

  • In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
  • Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
  • Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.

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1921

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Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government

Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council

Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south

Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory

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Ep1: A recovery like no other- the unevenness of the economic recovery 

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Ep4: Inflation- services and goods - debt risks 

Ep5: Travel and tourism 

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2012-2015

The company offers payments/bribes to win key contracts in the Middle East

May 2017

The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts

September 2021

Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act

October 2021

Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence 

December 2024

Petrofac enters into comprehensive restructuring to strengthen the financial position of the group

May 2025

The High Court of England and Wales approves the company’s restructuring plan

July 2025

The Court of Appeal issues a judgment challenging parts of the restructuring plan

August 2025

Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision

October 2025

Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange

November 2025

180 Petrofac employees laid off in the UAE

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.”

Company profile

Company: Verity

Date started: May 2021

Founders: Kamal Al-Samarrai, Dina Shoman and Omar Al Sharif

Based: Dubai

Sector: FinTech

Size: four team members

Stage: Intially bootstrapped but recently closed its first pre-seed round of $800,000

Investors: Wamda, VentureSouq, Beyond Capital and regional angel investors

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Updated: March 07, 2025, 6:22 AM