Egypt Seeks to Expand Economic Ties with Israel Despite Political Stalemate

Although diplomatic relations between Israel and Egypt remain stalled, behind the scenes Egypt is interested in deepening economic cooperation with Israel. The ongoing political deadlock is exemplified by Cairo's refusal to approve the appointment of Israel's ambassador to Egypt, Uri Rotman, due to the unresolved Gaza situation and tensions with the Israeli government. Facing significant economic challenges, Egyptian officials are eager to welcome Israeli economic delegations and increase bilateral trade. Efforts are currently underway to involve the United States in facilitating trade discussions.

In contrast to the political freeze, there is extensive cooperation in the energy sector between the two countries. Recently, an Israeli military delegation met with their Egyptian counterparts in Cairo, where they also attended a soccer match between Argentina and Egypt. According to a source cited by the Saudi newspaper Asharq Al-Awsat, these talks included discussions on advancing the second phase of former U.S. President Donald Trump's Gaza plan and the issue of Hamas weapons handover.

The Israeli delegation reportedly conveyed to Egyptian officials through Nikolay Mladenov that if current diplomatic efforts fail, Israel may resort to military action in Gaza. Egyptian concerns include the possibility that Israeli Prime Minister Benjamin Netanyahu might launch a Gaza operation driven by political calculations related to upcoming elections, aiming to rally domestic support. Despite Hamas's government resignation, senior Israeli and Egyptian military officers continue to meet, with mediators insisting on Hamas's disarmament as part of the peace process.