Will Israel-Egypt relations collapse with gas deal?

Sabotaged gas pipeline exploding in el-Arish, Egypt, last month

Sabotaged gas pipeline exploding in el-Arish, Egypt, last month

On announcing that it was terminating its contract to supply gas to Israel on Sunday, Egypt's Natural Gas holding company immediately claimed that the decision had been made on a purely commercial basis.

However, the move was pounced upon by the country's presidential candidates as yet another opportunity to burnish their national and anti-Israel credentials.

Even the leading secular candidate, former Foreign Minister Amr Moussa, currently seen as the most "moderate" of potential presidents, said that cutting off the gas supplies had been a "natural step".

The widespread antipathy towards Israel among the Egyptian public is not the only reason that the natural gas deal has been deeply unpopular.

The fact that the deal had been signed by the previous Mubarak administration and brokered by tycoons close to the deposed president has given rise to a wide array of conspiracy theories regarding the bribes allegedly paid to those involved in the deal, at the expense of the Egyptian people. Politicians of all stripes have claimed that Israel was getting gas on favourable, below-market terms.

Meanwhile, long before the cut-off announcement, Israel had already been using alternative energy to the Egyptian gas that, until early 2011, supplied about 40 per cent of the electricity grid's needs. Over the past 15 months, the gas pipeline through Sinai has been sabotaged 14 times by Bedouin tribesmen and there has been little gas coming through.

The Israeli government ministers, including Prime Minister Benjamin Netanyahu, stressed that this was not a political issue; rather, as Mr Netanyahu put it, a "business dispute".

But one official at EMG, the Israeli company importing the Egyptian gas said this week: "Of course this is a diplomatic issue, the oil shipments were part of the original Camp David Accords and then they were substituted by natural gas in a second, separate agreement."

Whatever the real reasons for the termination of the gas deal, it is a very bad sign for relations between Israel and Egypt. Foreign Minister Avigdor Lieberman was quoted this week speculating that Egypt may cancel the peace treaty and that the IDF should begin preparing to reinforce its forces near the Egyptian border.

This report caused the chairman of the Supreme Council of the Armed Forces, Field Marshal Mohamed Hussein Tantawi, to say that Egypt would "break the legs" of those coming close its border.

Marshal Tantawi's comments dismayed Israeli officials, who have seen him as the main stabilising figure in Egypt since the revolution.

Last updated: 2:35pm, April 26 2012