Israel’s immediate neighbors face the most direct challenges. At the moment, the precarious situation along Israel’s border with Lebanon threatens to become another active front in the conflict. Meanwhile, Jordan and Egypt are facing significant pressure from many directions given their unparalleled historic roles in the Israeli-Palestinian conflict and their peace treaties with Israel.

As far as Egypt is concerned, there are six major dilemmas that it will need to navigate in the coming weeks and months:

1. A dilemma in its relations with Israel

Except for a few diplomatic clashes over the years — mostly related to the Israeli-Palestinian conflict — Egypt and Israel have succeeded in maintaining constructive relations since the signing of their peace treaty in 1979.

Both countries view relations as critical to their respective interests and have sought to maintain and strengthen the relationship, even as Israel’s ongoing occupation practices toward the Palestinians have challenged and placed limitations on the extent of what is possible.

In the past, wars have taken place when Egyptian-Israeli relations were at a high point, allowing Egypt to play a successful mediating role between Israel and both Hamas and Palestinian Islamic Jihad (PIJ). The sequencing and trajectory of this war have made assuming this role exponentially more difficult, even as Egypt understands and seeks to navigate Israel’s reaction to Hamas’ October 7 attack.

At the outset of the fighting, Israel suspended its gas exports to Egypt — later to be resumed, but in smaller quantities. Then an attack along the Egyptian border crossing with Gaza, which Israel has claimed was accidental, resulted in injuries to Egyptian security and damages on the Egyptian side of the border.

A more serious disagreement took place when the official spokesman of the Israeli army indicated that Palestinians should head to Egypt. Egypt strongly criticized this position, and Israel took a minor step back by indicating that the crossing on that border was currently closed. However, the Israeli position remains unchanged, and Prime Minister Netanyahu continued to lobby to pressure Egypt to accept large numbers of refugees — to no avail. Alongside Netanyahu’s diplomatic push, there has been an unprecedented Israeli media campaign attacking Egypt for its firm position against accepting refugees. Meanwhile, Israel’s military operations have continued in a manner that pushes Palestinians toward the Egyptian border while preventing them from returning to the north of Gaza.

The Israeli government has further indicated that after the war, Israel must control the Philadelphi corridor — a strip of land running the length of the Egyptian-Gaza border that Israel controlled until its 2005 disengagement from Gaza. Israel is also insisting on maintaining control over the Rafah border on the Palestinian side, as well as overall security responsibility over the Gaza Strip for an indefinite period after the war. Egypt rejects both of these Israeli demands. This comes amid finger-pointing at Egypt for the presence of the weapons in Gaza, something which may complicate Egyptian-Israeli relations further. Until now, the relations have weathered immense challenges, with Egypt, Israel and the United States working on ways to secure the border between Egypt and Gaza. 

2. A dilemma in Egypt’s relations with the Palestinians

The relations between Egypt and the leaderships of the Palestinian Authority, Hamas and PIJ have seen their ups and downs in recent years. It is no secret that Egypt would prefer a new Palestinian leadership. But at the same time, it has not been eager to see elections take place out of fear that there would be a repeat of the 2006 elections, when Hamas won.

Tensions between the Palestinian Authority and Cairo have been high, beginning when the Palestinian president felt that Egypt would prefer to deal with a different Palestinian leader. Around the same time, following the military deposition of the Muslim Brotherhood President Mohamed Morsi — elected after the 2011 Egyptian revolution — tensions arose between Egypt and Hamas. Under the new government, Egypt considered Hamas part of the Muslim Brotherhood and at one point even accused Hamas of supporting terrorist groups in Sinai.

While Hamas subsequently pivoted to cooperate with Egypt to counter the Islamic State in Sinai, tensions have not dissipated completely. Today, Egypt remains extremely concerned about an anticipated wave of Palestinian radicalization as a result of the war.

3. A dilemma in peacemaking

Ever since then-Egyptian President Anwar Sadat visited Jerusalem in 1977, Egypt has been extremely active in advancing the prospects of peace, via its longstanding position of supporting the pursuit of a two-state solution. However, the Israeli and Palestinian context, and their respective leaderships, has made this task increasingly challenging.

While President Abbas — who argues for a negotiated two-state solution and nonviolent resistance — has failed in the pursuit of advancing peace, it is also clear that the violence and armed resistance of Hamas and PIJ have so far not been able to end occupation either.

At the same time, over several years, Israeli Prime Minister Netanyahu has affirmatively rejected commitment to a two-state solution, and followed a policy that critics say has strengthened Hamas by rewarding them with concessions, including prisoner releases, at the expense of weakening Abbas and the Palestinian Authority. While Israel has set an objective of defeating Hamas, Egypt believes that this will not be an achievable goal and that the movement cannot be dealt with solely through force. This poses a challenge for Egypt, as it seeks to pursue a constructive role that relies on maintaining its credibility with both Israelis and Palestinians. Complications are compounded by Egypt’s belief in an anticipated change in the Israeli in government in a manner that remains unpredictable.

Despite all the challenges, the Israeli-Palestinian conflict now occupies center stage, and President Biden has reiterated the need to move toward the two-state solution numerous times since the war started. Yet, Egypt and several Arab countries have indicated to Israel, the United States and European nations that their active engagement in the post-war efforts is predicated on not just rhetoric, but a credible linkage to a clear diplomatic endgame that leads to a two-state solution.

Furthermore, to ensure the buy-in of all the necessary players, a fragmented and piecemeal approach will not work. A comprehensive approach with a reasonable timeframe will be necessary, despite its difficulty. In this view, such a political package should include terms of reference for a two-state political horizon, humanitarian assistance, reconstruction, Palestinian reform and eventual elections, Israeli regional normalization, and Israeli and Palestinian security — including disarmament, demobilization and reintegration (DDR). Sequencing will continue to be a challenge. However, if the political will is there, particularly in the United States, then regional partners would be ready to contribute in a meaningful and effective manner.

4. A dilemma regarding mass Palestinian displacement

Historically, Egypt has welcomed people forced to flee their homes. In recent years, according to UNHCR, this has included tens of thousands of refugees from Syria, Sudan, South Sudan and more. Since the onset of the conflict in Sudan in April 2023, Egypt has been a primary refuge for Sudanese women and children seeking safety. Egypt had no difficulty in welcoming refugees who now live in Cairo and other urban settings, as Egypt historically has never established refugee camps.

However, Palestinian refugee issues are much more complicated, as they are linked to historical fears of mass transfer and the liquidation of the Palestinian cause. Egypt considers this fear more justified today, given statements from some members of the current Israeli government openly promoting the desirability of Palestinian migration, as well as earlier reports of an Israeli ministry concept paper that proposed the transfer of Gazans to Egypt’s Sinai Peninsula as a possible scenario. While the president of Israel, Isaac Herzog, has stated that this does not reflect the policy of the state of Israel, such statements in the context of the ongoing war have led Egypt, Jordan and many other countries to express deep concern that the Israeli objective is the mass dispossession of Palestinians, a repeat of what happened in 1948 during the war between Israel and the surrounding Arab states following Israel’s declaration of independence.

The fear is compounded by related and longstanding rhetoric toward the West Bank, and the concern that Gaza could be seen as a precedent for displacement there. This would destabilize Jordan, and the king of Jordan has reiterated his opposition to additional refugees in either Jordan or Egypt. Egyptian President Sisi has warned that pushing the Palestinians to Egypt could wreck peace in the region, adding that a mass exodus would risk bringing militants into the Sinai, where they might launch cross-border attacks on Israel, potentially endangering the Egyptian-Israeli peace treaty.

Egypt is encouraged by the firm pushback of Western powers — to including the U.S. rejection of statements coming from Ben Gvir and Smotrich — to rhetoric that the United States has insisted is “inflammatory and irresponsible,” and must “stop immediately.”

Palestinians have also not moved in significant numbers toward the border, and many insist that they want to remain in Gaza even though the humanitarian situation is more than devastating — with scant water, food, medicine, fuel, electricity or housing. This is why Egypt has prioritized humanitarian assistance and was willing to accept the latest U.N. Security Council Resolution to address this issue instead of insisting on provisions pertaining to a cease-fire that would have been met with a U.S. veto.

5. A dilemma in dealing with security in a post-war environment

The perception in Egypt and many Arab countries is that Israel wants to get rid of its problems in Gaza and have them become the responsibility of others, particularly Egypt. Predictably, Egypt has rejected this stance, insisting that at the end of the day, Gaza is a part of the occupied Palestinian territory and therefore remains Israel’s responsibility according to international law until the occupation ends.

This position explains why Egypt, and other Arab states, opposed the deployment of an Arab and/or international force in Gaza — one that would presumably take on the responsibility of dealing with those remaining from Hamas after the war in order to ensure they do not reconstitute a threat to Israel. For Egypt and the other Arab states, setting up the potential for such a military confrontation between their forces and those remaining from Hamas would be unacceptable.

That said, Egypt and other Arab countries would probably be willing to consider playing a role in post-war security, provided that there is a clear set of conditions:

• It is in the context of a credible plan toward a two-state solution.
• That security is achieved for both Palestinians and Israelis.
• That all the territory occupied in 1967 is dealt with as a single unit.
• That this is agreed in the context of a U.N. Security Council Resolution or a credible international conference.

6. A dilemma in political bandwidth under difficult regional conditions and extreme economic woes

Egypt is facing an unprecedented set of simultaneous challenges that have huge implications for its national security. These include the current war in Sudan and the continued conflict in Libya — two critical neighbors for Egyptian national security — and the continued failure to resolve the dispute with Ethiopia on the Renaissance Dam (Egypt recently withdrew from the negotiations).

Finally, as a result of the ongoing war, the Houthis in Yemen have disrupted maritime transportation in the Red Sea, which will have a significant impact on the revenues of the Suez Canal.

This is also taking place at a time when Egypt is suffering from a severe economic crisis. As a result, Egypt, which would have normally been eager to play a more active role, is constrained by multiple significant and simultaneous challenges, making engagement a tall order. However, the stakes for its own national and regional interests, including the pursuit of a more stable and peaceful region, are too high to ignore. Not for the first time, the Israeli-Palestinian conflict has forced itself to the top of the regional and international agenda, and not for the first time, Egypt finds itself as a critical actor with the imperative to act.