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Israel-Egypt Relations:
Overview of Bilateral Cooperation


Israel-Egypt Relations: Table of Contents | Peace Treaty | Six-Day War


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Israel and Egypt signed a peace treaty in 1979, marking the end of 30 years of relentless hostility and five costly wars. The treaty was preceded by Egyptian President Anwar al-Sadat's visit to Jerusalem (1977), at the invitation of Israel's Prime Minister Menachem Begin, as well as the signing of the Camp David Accords (1978) which constituted a basis for peace between Egypt and Israel and between Israel and its other neighbors. The accords also addressed the need to solve the Palestinian issue, following a five-year interim phase of autonomy for the Palestinian Arab residents of Judea and Samaria (the West Bank) and the Gaza Strip. President Sadat and Prime Minister Begin were jointly awarded the Nobel Peace Prize for their achievement.

The peace implemented between Israel and Egypt consists of several major elements, including the termination of the state of war as well as acts or threats of belligerency, hostility or violence; the establishment of diplomatic, economic and cultural ties; the removal of barriers to trade and freedom of movement; and withdrawal by Israel from the Sinai peninsula, with agreed security arrangements and limited force zones. Israel completed its withdrawal from the Sinai (1982) according to the terms of the treaty, giving up strategic military bases and other assets in exchange for peace.

Although Egypt was ostracized by other Arab states following the signing of the treaty, most have since reestablished relations with Egypt and reopened their embassies in Cairo. The headquarters of the Arab League, which had been transferred to Tunis, were reinstated in Cairo in the early 1980s.

Having to overcome 30 years of distrust and hostility, normalization of relations between Israel and Egypt is a long and arduous process. Yet, embassies and consulates have been established by both countries, and meetings between government ministers and high-ranking officials take place regularly.

In 2004, Egypt and Israel signed a Qualified Industrial Zone (QIZ) Agreement under which jointly produced goods enter the U.S. market duty free as part of the U.S.-Israel Free Trade Agreement. As a result of the QIZ, Israeli exports to Egypt grew 110% in 2005.

Following the outbreak of Palestinian violence (September 2000), relations cooled considerably and Egypt recalled its ambassador, who later returned. Even during the tense period, cooperation continued in agriculture, and the joint military committee met regularly. As the Palestinian War wound down in 2005, Egypt’s trade with Israel picked up, and was expected to rise 130 per cent as a result of a U.S.-brokered agreement that created an estimated 15,000 Egyptian jobs. Egyptian-Israeli trade will rise from $58 million in 2004 to a projected $134 million in 2005. The volume is small — Egypt’s global exports are worth about $12 billion a year, Israel’s are about $30 billion — but the growth in trade is a positive development in the relationship. Still, Israeli investment in Egypt remains stagnant, largely because of lingering distrust and political sentiment.

In 2005, Israel signed an agreement to buy 1.7 billion cubic feet of Egyptian natural gas for an estimated $2.5 billion over 15 years, fulfilling a commitment made in an addendum to the peace treaty.   This treaty was nullified by Egypt in 2012, citing the fact that Israel was not living up to it's obligations under the agreement.

The owners of the Israeli Tamar offshore gas field announced on October 20 2014 that they had struck a deal with Egypt's Dolphinus Holdings to sell Egypt up to 2.5 billion cubic metres of fuel over the following 7 year period.  This fuel will make it's way to Egypt through the same East Mediterranean Gas pipeline that Israel has gotten oil from Egypt through in the past.  The deal is said to be worth around US $4 billion ($3.13 billion Euros).  Noble Energy, a gigantic natural gas conglomerate based out of the United States owns 36% of the Tamar oil field.  Israeli gas exports are expected to bring in $60 billion in revenue over the next 20 years.  This is the largest ever trade deal signed between Egypt and Israel. 


Sources: Israeli Ministry of Foreign Affairs; Khaleej Times Online, (December 17, 2005); Carol Migdalovitz, “Israel: Background and Relations with the United States,” DC: Congressional Research Service, (July 26, 2006), Israel National News (October 20, 2014);

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