Egypt protests
A senior army officer salutes a crowd of cheering protesters at Tahrir square in Cairo January 29, 2011. Photo by AP
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The events of the past few days in Egypt - seemingly the most important development in the region since the Islamic revolution in Iran and the Israeli-Egyptian peace accord in 1979 - represent a nightmare to Israeli intelligence leaders and planners. While many other countries view the possible ouster of a government that denies basic rights to its citizens with satisfaction, the Israeli point of view is completely different.

The collapse of the old regime in Cairo, if it takes place, will have a tremendous influence, mostly negative, on Israel's situation. In the long run, it threatens to endanger peace with Egypt and Jordan, the greatest of Israel's strategic assets after U.S. support. It is likely to bring about changes in the Israel Defense Forces and worsen the Israeli economy.

Israeli intelligence, like most of the West, did not foresee the force of the turnabout (the conclusive epithet "revolution" will have to wait, it seems ).

Like them, the overwhelming majority of media pundits and academic experts were also mistaken. While the intelligence services did depict 2011 as a year of possible regime changes in Egypt and Saudi Arabia, accompanied by unpredictable results, it did not forecast a popular uprising.

Furthermore, the new head of intelligence, Gen. Aviv Kochavi, at his first appearance before the Knesset Foreign Affairs and Defense Committee on Tuesday, told the MKs that "there is no concern at the moment about the stability of the Egyptian government." That same day Egyptians took to the streets.

By the end of the week, the midnight oil was burning at intelligence headquarters. The main questions of the coming days are about what Egyptian President Hosni Mubarak and the army will decide to do.

Mubarak, who suffers from cancer and whose health has been worsening recently, faces a dilemma reminiscent of the bind Tehran found itself in with the "Green Revolution" of 2009.

However, while the ayatollahs in the end used unrestrained force, the elderly Egyptian president must decide whether he wants his 30-year rule to be remembered for a bloodbath near its end.

Yet yesterday, the number of deaths among demonstrators had climbed above 35.

The army was called out to the streets of large cities yesterday in order to spell the exhausted police force. The soldiers, unlike the police, have no means to disperse demonstrators. If they receive orders to shoot, it will be live fire, and thousands of people will be killed.

Is the army still loyal to the president? Dozens of tanks that streamed into central Cairo bore graffiti that read "Mubarak will fall" - sprayed on by demonstrators.

Israeli suspicions about the functioning of the American administration in the Middle East, which began with U.S. President Barak Obama's speech at a Cairo university 18 months ago, have now turned to astonishment at the stammering coming out of Washington over the last few days.

Here too, the precedent is Iranian. Like Jimmy Carter facing the shah's ouster, Obama hesitates between supporting a loyal but tyrannical ally, and the basic American instinct in favor of a popular struggle for freedom.

And like Carter the Democrat, Obama too favors the second option.

The Israeli suspicion is that under the surface of the Egyptian struggle, which is on the face about economics and democracy, lies an Islamic element. Islamists are not yet pulling strings and making plans, but they will be the first to recover and exploit the confusion to attract followers.

The fall of the Mubarak government, father and son, will have far reaching security consequences for Israel. It will immediately damage Israel's quiet cooperation with the Egyptians on this front and it may lead to a thaw between Egypt and the Hamas government in Gaza.

It could damage the status of the international peacekeeping force in Sinai and lead to a refusal by Egypt to allow movement of Israeli military submarines and ships in the Suez Canal, employed in the last two years as a deterrent against Iran and to combat weapons smuggling from Sudan to Gaza.

In the long run, if a radical government achieves power, rather than a variation of the current one, there is likely to be a real freeze in the already cold peace with Israel.

From the army's point of view, this will require reorganization. It has been more than 20 years since the army has had to prepare to deal with a real threat from Egypt.

Over the last decades, peace with Egypt has enabled a gradual cutback in the deployment of forces, a reduction in the age of those exempt from reserve duty, and a sweeping diversion of resources toward social and economic goals.

The army is trained for clashes with Hezbollah and Hamas, at the most in combination with Syria. No one has seriously planned for a scenario in which Egyptian divisions enter Sinai, for example.

If in the end the Egyptian regime falls, one possibility that seemed incomprehensible just a few days ago, is that the uprising will spread to Jordan and threaten Hashemite rule.

Then Israel's two long, peaceful borders will face an entirely new reality. A new Middle East, but not the one we wished for.

The Palestinians too are likely to reach the conclusion that mass demonstrations, combined with a limited amount of popular violence, will advance their statehood bid without the need for an agreement that would include obligations to Israel.