Can Egypt's recent diplomatic wins lead to lasting stability after Gaza war?

Egypt has managed to safeguard and even restore some of its interests that were jeopardised by the recent Gaza war through a series of diplomatic efforts, but lasting stability could be hard to come by due to economic pressures, former officials have told The National.

The country played a key role in the Arab rejection of US President Donald Trump's proposal to take over the Gaza Strip and displace its 2.3 million Palestinian residents, instead presenting its own plan for the enclave's reconstruction that aimed to keep Palestinians on their land.

This stance served a dual purpose for Egypt: it aligned with the hardline Arab position that Palestinians should remain in their homeland, while also preventing an influx of Palestinian militants into Egypt, which the state would view as a national security threat.

The fragile ceasefire between Israel and Palestinian resistance factions, in which Cairo played a crucial mediating role, remains a key factor in determining whether recent improvements in foreign investor confidence and Suez Canal traffic can be sustained.

The National spoke to two of Egypt’s former assistant foreign ministers on the country’s efforts to maintain its interests at this precarious time, Rakha Hassan, now a member of the Egyptian Foreign Affairs Council, and Hussein Hareedy, who formerly headed the ministry’s Israel department.

Egypt was one of the Arab nations most affected by the war in the coastal enclave. It organised and delivered aid through its shared border crossing and received at least 115,000 displaced Palestinians (who settled all over the country) in addition to hundreds of wounded.

Suez Canal revenue

Beyond political hurdles, the war also took away one of Egypt’s most important sources of foreign currency – Suez Canal revenue – after repeated attacks on Red Sea shipping by Yemen’s Iran-backed Houthis drove most ships from the waterway and cost Egypt about $7 billion in losses throughout last year alone.

The losses came at an inopportune time for the country's dwindling economy, as it was contending with high inflation and stringent economic reforms mandated by the International Monetary Fund in exchange for financing. This made efforts to resume global shipping through the Suez a top priority for the government.

The canal’s authority on Sunday announced a small rise in the number of ships that had rerouted from going around the Cape of Good Hope, the much longer journey vessels have been taking to avoid Houthi attacks in the Red Sea and Gulf of Aden. The authority said it expected this increase in traffic to continue after the Houthi group said it would no longer target international shipping when the ceasefire took hold on January 19.

The authority’s chairman Admiral Osama Rabie, has held several rounds of meetings with international shipping companies over the past month in a bid to urge them to return to the canal. The authority has also revamped its ship repair docks and issued discounted crossing rates.

However, despite the authority’s optimism, most global shipping companies have said they will continue to steer clear and meanwhile monitor developments.

“In Egypt, we welcome the increase in shipping through the Suez Canal but whether this continues will depend on many things,” Mr Hareedy told The National. "The Houthis have halted their attacks but have promised to resume them should Israel relaunch its military campaign in Gaza. So I think the continuation of the ceasefire is going to be essential and Egypt is undertaking intensive diplomatic efforts to ensure it holds. It's what’s best for everyone in the region.

“But even if the ceasefire holds, there’s no telling whether the Houthis, who do Iran’s bidding, won’t relaunch their attacks in the Red Sea should the Trump administration’s upcoming engagements with Tehran not go favourably.”

Mr Hareedy said there is a great deal of interest in the Arab world in how US-Iranian relations will develop under Mr Trump and it is possible Iran would use the Houthis to improve its bargaining position with the new administration.

However, Mr Hassan said there was “no need to doubt the Houthis' word, as they have been clear about their demands since they started attacking ships in the Red Sea”.

“I am more sceptical of Israel’s ability to uphold its end of the bargain because it has been only a month and they already breached the ceasefire agreement multiple times," he added. "The Houthis haven’t. Also, I don’t think Iran is the same villain it used to be. With [Saudi Crown Prince] Mohammed bin Salman recently calling it a brother nation and its large-scale trade with the GCC [Gulf Co-operation Council], the region’s dynamics have shifted and the US must understand that.”

Perhaps these changing alliances are best exemplified by the unified Arab response to Mr Trump’s proposal for the US to take over Gaza and displace its 2.3 million people, which was widely denounced. Last week a GCC conference was held in Riyadh with the participation of Egypt and Jordan to present the alternative plan.

Rebuilding Gaza

Large-scale media attention on Egypt’s central role in the reconstruction plan has boosted Mr El Sisi’s profile at home, where he is being celebrated for his hardline position to keep Palestinians on their land.

However, Mr Hareedy said Mr Trump’s proposal was a “sideshow” and that the US President was never committed to taking over Gaza but wanted to distract from Israel’s plans to annex key areas of the occupied West Bank where illegal settlers, aided by the military, have continued to abuse Palestinians and form settlements outside the bounds of international law.

“At the same time that Trump made his deliberately inflammatory public statements, Israel deployed its troops on the West Bank, committed atrocities, wide-scale arrests and now we hear that it is expelling refugees from their camps,” Mr Hareedy said, referring to attempts to vacate Jenin, Tulkarm and Nur Shams in the past week.

Mr Hassan said: “Gaza is not religiously significant for Zionism and Israel only cares about it because it has repeatedly proven to be a security threat. The West Bank is in the Hebrew Bible and it has been one of Israel’s stated goals for decades to annex it. I think Trump will try to leverage the Arabs rejecting his plan for Gaza to force their hand on allowing Israel’s expansion in the West Bank."

Both men stressed the need for Arab countries to keep the West Bank at the top of the agenda during the Arab Summit on March 4, which will be held in Cairo to present the reconstruction plan for Gaza. However, the prospects of Arab countries responding to Israeli abuse in the West Bank at the same scale that it did for Gaza remains uncertain for several reasons, they said.

Foremost is that neither Iran – which supplied Gaza with weapons in its fight against Israel – nor the Houthis are affiliated with the Palestinian Authority, which governs the West Bank.

“This rules out the Houthis using the same tool of attacks on Red Sea shipping, which proved so effective during the war in Gaza,” said Mr Hassan. "The Houthis were compelled to act in solidarity with Hamas and the PIJ because they all belong to the same Iran-backed axis and they owe each other allegiance. There are no such links to groups in the West Bank."

This reduces the impetus for Cairo to take the same hardline positions as Suez Canal revenue would not be threatened if the Houthis remain peaceful in the Red Sea. Egypt also does not share borders with the West Bank.

Whether Cairo’s success at mitigating the knock-on crises caused by the war on Gaza continues will also depend largely on Israel’s actions and whether it chooses to honour its ceasefire agreement with Gaza.

“Egypt didn’t start this war, it was dragged into it by Israel’s actions and it will most likely have to become embroiled again if the Israeli far right succeeds at resuming the war after the first phase of the ceasefire is over," Mr Hassan said.

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