EGYPT: REGIONAL ISSUES AND RELATIONSHIPS (DELETED)

Created: 4/1/1983

OCR scan of the original document, errors are possible

Egypt; Regional

RebHnntimfy

KeyMubarak goverrunent's up foreign policy priorities are to broaden

la tbe Middle East peace proceu tod to achieve rapid

omprehensive Arab-Israeli settlement- Only if these

goals are met can Egypt resume what if regard, as its rightful Arab leadership role while nuinlaicii^ Its peace agreement with Israel Wtjgm

Cairo considers peacemaking an urgent task. Ii believes that Israeli settlementeading to de facto annexation of tbe West Bank, and that US attention sooo will be diverted from tbe Middle East by the Presidential election campaign Egypt has been encouraging Arab support for (be Reagao Lnitiaiivc. which ii regards as the most promising basis for a

will not return hi Ambassador to TH Aviv without nn agreed timetable for withdrawing Israeli troops from Lebanon. Egyptian leaden aro concernedtalemate regarding Lebanon might delay an overall settlement, but they recognize, that tbe Gemayel government cannot afford

i

flout the Arab majority by making major concession* to brad.

la addition to tbe Lebanese issue, Egyptian-Israeli disagreements include the Tabs border ehapale and IwaeTs complaUiu abowt Egyptun unmlliDg-ness to increase trade, icwnsm. and other bilateral exchanges The current low levd of economic aad cvltvral relations partly reflects tbe decisions of Individual Egyptians not to deal with Israel. We believe, however, that tbe Egyptian Government has condoned some anti-Israelivirulent pressorder to dissociate itself from Israeli policy.

Tbe recently resumed Egyptian-Israeli talks on Tabs and trade are ualikdy to show sigailscaat rendu uaJcsa there is progress toward solving (he Lebanese aad Paicstmiaus the nsesnuane. we beUeve the Mubarak government will cooperate won toad only to tbe minimum extent required by tbe peaceWM

Egypuaa-Antb relations have improved, but Egypt's full reintegration into Arab ranks will depend on further progress ia resolving Arab- Israeli problems and thus probably is at least several months away. Moderate Arab governments generally favor rwrrosliratioe erf relations with Cairo but aro unwilling to mow without tbe supportlear Arab Co menses. Moil of the moderaies are deferring on this issue Io Saudi Arabia, which rt reluctant to normalize tins io the ace of strong radical opcotiiioo. I

lO

Mubarak rejects any precondUkms to reintegration and will wait for the other Arabs to take the first step lo restore relations. Cairo is in no hurry to resume formal diplomatic ties because it already has substantial political, economic, and military links with most Arab countries and the PLO. Iraq has moved especially far lo repairing relations with Cairo because it depends heavily on Egyptian arms in its war against Iran.

want to stay oat of war, and intend to return to Arab n

t tlwa^

was under pressure to take even stronger action against Israel 1

Public opinion la Egypt generally supports Mubarak's refloat! policies. Like their government, roost Egyptians are disillusioned with Israeli

i ranks only oo r, Mebarak

pressure to take even stronger action against Israel than be did.

Tae US role Is critical to the achitvemrct of Egypt's regional goals. Although the Mubarak government is pessimistic about Wuhlngton's willingness to coerce Iirad into making conccuioos. it nevertheless is counting on such pressurethe keyomprehensive peace. fl|

We believe that Egypt will continue the main lines of it. regional policy during the seat few months even with continued stalemate with Israel. Mubarak realizes that to abandon the US-led peace process would jeopardize oooooxnic and military aid from the United States. Another provocative Israeli action, such as an armed attack against an Arab state, probably would lead Cairo to break diplomatic relations with Israel but not to give up all hopeomprehensive peace. Other Egyptian options would be lo interrupt oilsrael, bar Israeli ships from the Seez Canal, or tnewe armed forces into the demilitarized zones ofut the risk of an Israeli mlliiarv faaaaaaa._makxs these steps unlikely.

.

Egypt: Regional Issues andReUlfoasatosM

Tbe governance! of Egyptian Pmldeoi Hossd Mubarak, is trying to reconcile two different role* for Egypt in >he Middle East. One Is thai of Arabosition to wtuch Egypt has bag laid claim by virtue of h* site Imm the home of one-lowib. of alltrength, and location. Tbehat of partner to Israel and lbs United States in at effortettle IB* Arab-Israeli dispute. These two roks ban confined em since Egypt's agreement with larael reniHcd la it* ostracism from Arab ranks,

Cairo's aspiration to Arab leadership is siroag, batha commitmenthe Egyptian-Israeli peaceMubarak has never wavered from bis positionhistoric agrccoacai with brad moat befor any comprehensiveMubarak has pubUdy utewed thai Egyptby the treaty aad the Casap Davidthey arc the only document* tbalto respect Arabhus, he argues,the oaty viablethe face of1 in rypressing Td Aviv to '

One -ay Egypt haa tried to bring other Arabs mio ihe peace negouatioea hti beet so proeaotea L'S-PLO dialogue. Egypt has been servingonduit for transiuitiing Ihe PLCs views to Washington, most recently during Mubarak's visit to Ihe Uedied States ia Jaaaary. Last November Mubarak began publicly crgjoe the PLO is recognize Israel in order lo snake"irect dialogic with (he United Sla tea. Mubarak has dropped this advice, dtbough he still says the PLO must play the "trump card" of

Cairo's other effort to broaden the peace proceu has

beenncourage Jordan and (he Pales tinism 10

agreeonsola for jointly entering negotiations wkh land. Mubarak coesmenuy sapporud UM liusacus-Arefai uQj aad to ihb end dispatched his adviser, Usama al-Bar, on repealedn February si-bizessage to King Hcucin promising "whatever support Jordan nccdi" tt cater the peace process on the basis of the Kaagan initiative,*

Mubarak government ks coaatlbg oa progressorapre beajjve peace to remove the teasMa belwcen these different itrands of Ita regional poUcy. Such progress would show the Egyptian people that Camp Danagasjaaj andeparate peace. It also would tacraasc moderate ki/loenceui Arab politics by facilitating Egypt'1 reintegration Into Arab. defusing tbe Ptkstiniu nwac, aad recVacing tbe USSR's opportunities for gaining laflntnoe ia the

rimary fordgo policy

Arab participation in tbe pee -

proems. Without such participation. Egypt refuses to resurocUie talks on autonomy in the Wot Bank and

Ik;

Hidovember ipeeeh thai other peaceth* Arab League's Fesaadrench UN iwtiawith the Reagan plan In their general approach aad can furnish useful Ideal Mubarak hai Indicated that the la plan Ii Bnobjeerjonabw but doe* not go far cnouib. Ilatcment of principle* that provide* no'

Despite their cossceratalemate in Lebanon willolution to (he Palestinian problem, Egyptian leaders do not favor major aonccaslont by Lebanon solely for tbe oka of getting the Israelis oat. Mubarak haa tcsd USnt. be agree* with LebaneseGemayel that Lebanon, being weaker than Egypt, caaaot afford to flout (he Arab majority et (hi* time byufl peace with IsracL Mubarak further stated, however, that toroopUtyaaon must take scene limited sups toward iti relaiiona wtthjrej_Ariv^

Egypt would wckosa* the company cf easKhw Arab Waia raoving toward nornMlirntion with braeL

Its prtUrrtiam about tbe peacehe Mubarak government haa wnmbastced the need to achieve visible progress soon. According to nuracroasbykiak, ihe chief reasons for urgency are:

Uracil settlement activity, which Mubarak haswarned ise (actslion of tbe West Bank

The US Presidential election campaign, which Egyptian leaden have said will aiaku aa energetic US rote in the peace process increasingly btfcaslbte after Out autumn. HpsaV

oes can be restored this rear, although not before foreign force* arc withdrawn from Lebanon. There

a*

roodlor such opumunL the US Embassy is Bctrntroad cccscsoros io Lebanon, both Inside and outside thein Iaror of eapand-rebtiooi aritbbscaot of Eayptiaaoaniarwciibi io Syria was ewemajor caiucabanoa'i recent troubles. fBJ^^

l^bsncac-EagrpcLu reiauco already bar* warned tpprcoablr daxisi tbe past several moo iha. In severalwith senior Egyptianfficiais. President Gemaycl has voiced strong supportcsumotioo of Egypt's Arab leadership rob. Uobocm aaddiplomati each bare pouted out to US officio It. however, that to mora too fast toward normalcoaMegative reaction Cram Syriak-rj to ict Syrian force* out of Lebe-

DtacaH with Israel

Tbe Egyptian-UraeJi relationship haa rebounded only slightly from the low point it reached last aummar. Ii ii itill. In Batraa OhaJi'icoldhe cceapataon of Lebanon ki the most niunooiateto Improved tieaV bot each sideitany of complaints It has voiced in diplomatic channels, la the media, and in the Untiedgypt's principal grievances, apart from Lebanon, have been:

CoouDMcd Israeli settlement activity la the Want Banc.

lsTaol'B rejection of all recent peace Initiauvea.

Tha terri torial dasputa over Taba on the Sinai border.

Annexation of East Jerusalem and the Golan

The Israeli bombiai of the Iraqi nudeer reactor in

Cairo contends that each of these violates tbe spirit of tbe Casap David accords. Moreover. Mubarak has asserted thai the Invasion of Lebanon Hoisted both ua spirit and the letter of Article Id of the peace treaty, which obligates ihe parses to oanervc tbe UN Charter aad other principles of International law.

from the Frotocol Concerning Relations of ike fames, annexed so the Egyptian-Israeli peace treaty of

TtoFmrtta:

U tstabllsh diplomatic and consular rela-ttont and to exchange ambassadors uponof ihe Interim withdretal.

Agree toil discriminatory barriers la normal economic relations and to terminateboycotnof each other upon completion of the Interim mUhantmsl.

a mutuality of Interest In goodrelations and agree to consider means to promote such relations.

cooperate in promoting peace, stability, and development In their region.

seek to foster mutual undemanding and tolerance and will, accordingly, ebetmnfromf propaganda against eachj

thai lac peaceoaadatka) ooriendship can be built only through the gradual evolution of good will and trust, and they frcqacoJy criticize what they see as IsraeTs pracirrity lo spell out every detailelationship in advance. Thesedeny that their rcbtioosrup with Israel isEgyptians have never accepted ihe Uracil view that one of the major decisions reached al Campomit explicit linkage between the bilateral treaty aad the negotiation* on the Went Bank andthat Egyptian-Israeli relations should ha insulated from regional events thai affect the prospect!mprehenaivc

Israeli actioits over the past fourlast year's invasion ofEgyptian confidence In theredible and willing negotiatingthough they have not overturned Cairo'sto the peace treaty. They aho haveMubarak's hopofo* Egypt to mediate

Jieve tbeernment"itnn!iag"eT that Tel Aviv can be led to adopt snore flexible pohciea but that tats wiD require greater pressure from tbe United States and world BLaf/

Cairo seems resigned to workingith the current Likud government. Early Egyptian hopea that Sharon's surrender of the defense portfolio would strengthen Israeli moderates quickly cooled when It became apparent that Sharon would remain in the Cabinet and ita keynother hardliner would become Defense Minister, and Begin would remain firmly la power. I

Israeli-Egyptian economic aad cultural relations (bowed sign* of improvement after lb* return of the2 bul have stagnated since the start of tbe Lebanese crisis. Apart from tha0 mdkoa per year in Egyptian oil sales to Israel, bilstcralneverrickle. Totirism In both directions haa dropped sharply aince fane- There tun are many fewer Egyptian* ranting Israel than Israeli tourists- Egypt.MP

Td Aviv accuses the Egyptian Government ofcunaOiag mnwnrrriit contacts lor politicalCairn replies thai the low level of noeoil trade and lourism reflects tbe choices of individualand Egyptian enterprise* aad i* not the result of goiernmealal manipulation. We believe there are dements of truth in both arguments. Eacept for oil, Ecypt has few products that meet Israeli needs. Israelanch greater range of ticca* that could be used by Egypt bat has been frustrated by Egyptian unwillingness to.

Sefret

believe that criticism of Israel in lbs Egyptianihc low level of noaoslbeen condoned bat not orchestrated by tbe government Egypt Ian journalists need little prodding to writei rup about Israel Wa believe the virtdant attacks, sometimes with sob-Jewish overtones, thai have appeared in Egyptian newspapers during the past year would have been even more eairemc If the Egyptian press were completely free from government influence. The opposition weeklies generally aretheir venomous comments about israd and Us leadership, but since Ocjocer the estabusumeaiwith governmentIo*HcirJPjYafJjV

Wa believe thai military aad security variations along tbe Egyptian-Israrii border are not deliberateby Cairo. The multinational observer force in the Sinai reports thai bothrucularlycom untied mimeroas infrscticuu of the peace treaty* terms, but thai neither has seriously violaIstd its latent. The Irtcadents of terroristreported by Israel are almost certainly the recall

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of Egyptian inability to polka tha border adequately because of the Urge area involved and because some of tbe guard force may be inept or bribable. It Is In Cairo's interest to try io prevent terrorist incidents In order to demcsnstrate thai Israel esc enjoy security within inoundaries afnvaan,

Israel and Egypt returned negotiations on Tabs in earlyhe disputemall pared of land at tbe northern end of tbe Gulf of Aqsba that Israd refused to relinquish when it withdrew from the rest of toeear ago There is little prospect for settling thiv dispute soon. Tbe Israelis consider Tabs to be one of their few remaining levers against Egypt. Td Am probably will withhold concessions unless lharc is movement in Ihc Egyptian-Israeli trade ncgo-tisilons that opened later in March. Cairo agreed to lbs trade talks in return for Israel's willingness, to discuss Ta hu. bat il refuses io make an expbch linkage between the iwo sets of negotiations. Tbe Egyptians are convinced thai their claim to Tab* is vabd and thai the issae is one of sovereignly and of Israel's willingness Io fulfill its commitments,ofTsciais have saidsvorsbls settlement of the daspate is needed to demonstrate to other Arab*fl*kacj ot negotiatingvh

Tha Mubarak government has tried to keep lbs door opaa in better relations. For esample, its decision to allow Isradavilion at ibe Cairotrade fair hi Marchesture to improve the aiancapacee in the bilsteral relationship, accordingenior Foreign Ministry official. Cairo sees little political advantage, however, in being significantly more coccseraUvc with the Israelis ibaa the peace treaty obligates it to

Iraq sad the rVtsfcu Csatf War

Neat to the set of issues involving Israel, Lebanon, and ibe Palestinians, the Iraq-Iran war is Egypt's chief regional concern. Cairo is proriding sulttantial support to Iraq (see box) partly to counter the danger it believes the Shia revolutsonary regime in Iran is posing to Arab governments throughoui the Persian

sytti

military aid to iraq

sincei egypt has sold as much as si billion worth of military equipment to baghdad. although that salts are excluded/ram official egyptian data, they represent egypt's largest export commodity alter oil we believe ihty have provided foreigno the egyptian military for its own overseas purchases of arms. in addition, the exports to iraq have increased economies of scale in the egyptian arms industry and have enabled cairo to dispose of somt of the soviet-made arms ii is replao ing with western equipment.

in addition to weapons. egyptian support for the iraqi war effort includes egyptian advisers in iraq. instruction in egypt of iraqi staff officers, andexchangei. numerous public and privatey senior egyptian otf4au.iadlca^ has resolved am to send its owno raq, even though baghdad requested troops,to mubarak. some egyptian citizens, however, are serving in rAe iraqi armed forces. most of these probably were civilian workers already in iraq when th> war began. there are indications that the iraqi government pressured some_gf these workers into joining the war effort,

genuine volunteers, most of whom evidently areandcairo

or reurernemi to some members of the egyptian armed forcesnuble them to go to iraq as civilian volunteerts

Oulf area. In addition, support to Baghdad is casing Egypt's reentry into the Arab world by ingratiating Egypt both with Iraq and with the other Gulf states, which share the concern about Iran.)

ntso may hope thai Us aid will lessen Baghdad's dependence on the USSR. Mubarak said io UN officials in February thai he believed Iraqi President Saddam Husnyn would be willing toeavy price to Moscow as lonn as he needs Soviet help in the war.

Egyptian-Iraqi political relations have warmedover the past year. There have been several high-level contacts, as well as such steps toward normalization as resumption of the tale of Egyptian newspapers in Iraq. Egyptian-Iraqi friendship ishowever, because It depends so much on Iraq's need for help in the war. Egypt and Iraq historically have been riyaJi for Arab leadership and the rivalry could reemergo if Saddam gets out of his current plightor Is deposed. Nonetheless: the friendly gestures that Iraq already has made have special significance because they cometate that led the outcry for

Reintegration Imd Arab Rsnks

Tbe political climate la the Arab world gradually has become more favorable for ending Egypt's isolation, as Cairo's diplomatic strategy succeeded In regaining the Sinai, alternatives to the US-led peace process have failed to develop, and the Arabs haveEgypt's necessarily important role in theInter-Arab divisions, however, so far havethe emergenceonsensus in favor of resuming full diplomatic relations and readmitting Egypt to the Arab League, The radical Arab position, expressed most forcefully by Syria, is that theagainst Egypt should continue (leeoderate Arab govern merits generally favorrelations with Cairo- but each one Is hesitant to take the lead and thereby become vulnerable io charges of fracturing Arab unity, violating Arab League decisions, and being disloyal to the cause of Palestinian self-determination. tjuajfaa. '

evidently does notprobably would notIraqis tolear military

ssVLnVfeEgypt'" assistance was wnded'oniyTo slave off an Iranian victory until Tehran realised it would haveediated settlement. Cairo

Sg? ret

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Wehat Saudi Arabiaey player ia determining "ben Egypt reenter* the Arab world Tbe imaller Pertian Gulf Mate* are Inclinedoil iRiyadh's lead oa this natter, aad tbe dependence of Morocco, Jordan, Iraq, and Lebanon on Saudi aatul-ance makes these states reluctant to net very far oat of step cither. White tha motives that Egypt escribes to Saadi Arabia may be partly valid, we believe that Riyadh" main concern has heea toadical backlash and additional Arab disunity. At (he Arab League tammlt last September in Fax. the Saudis played theirote as cooctlialor. and King Fabd stressed that reintegration of Egypt ihould come about only through (ha collective action of the Arabhe Saudis claim (hat thereonsensus in favor of reintegrationcenario foraaaaaaaHaaaBVlf * *

Meat Egyptians pueeire Egypt as tbe center aad leader of th* Arab world. This concept la grounded in aatioaabsl pride and ha* boon reinforced by years ofpropaganda. panicuUrlj daring Naair's rale. The estrangement of Egypt from other Arab atatrs thus cause* someat least amongsegment* of (he population ore less conceraed. but (hey do not understand why Egyptiaa-Arab rebtsoaa have sot returned to theireat Egyptian look forward lo reintegration not onlyeans of restoring Egypt's

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The Mubarak government sees no particularin restoring diplomatic rdetioa* with theargely because it enjoy* considerable cooperation with most Arab states even without formal tics (seegyptian leader* have stated publicly that thay would welcome renewed ties but thatp to Ihe iiatcs that broke rcatinas to take tha initiative to restore them. Mubarak aad his advism have made dear that Egypt will not renounce Camp David or accept any other precondition' to rcintcgratloa. We believe that, despite tha difficulties Egyptian lea dan have etKoantercd in tha peaca process, tbey judge that eventsB hgye shown that Egypt wa> right and the Arabs who opposed aCTommodatiou with arad were wrong. Egyptian leaders can sea the Arab states already moving in Egypt's direction, and we believe that (key ccewidar itiandfor Egypt lo cbanga la policia nowBMP-

thCthat

ress the km* of rdniegration could be counierpro-

.hit unit

Like their gesverrassent, however, most Egyptians do not scam eaeer to press the issue of restoringey believe that tbe Arabs need Egypt more than II reeds ibe Arabs, and that it is up to tbe Arabs to nuke the necessary conciliatory moves. Moreover, thereesidue of bitlcrncas sgainst tbeales for having adopted anti-Egyptian policies ia tbe first

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Egyptian un^Uingness to make sacrifices on behalf of other Arab* is apparent ia attitudes toward the Palestinian problem. Egyptians believe thaiorne more than their fair share of the fight for Palestine by leading ibe Arab side in four wars against Israel. Although some members of lbs Egyptian military favored taking In tome of the Palestinians who were driven out of Beirut, most Egyptian show little enthusiasm forarge new PaJeatiaiao coa Unseat into Egypt. They seem to believe thatresence weald avean added competition for rob* and housingotential for the same sort of trouble the Palestinians brought to'

peace and probably aever did. Aiilaapuadta that Israd duped Egypt into derruliurirmg most of tbe Sinai in order to give theree band iaoo ssbbV

Despite Ibe gloom about prospects for aa overall Middle East settlement. Egyptians do not wantwar with brad. This sewiment is particularly evideni among military officers, some of whom still are dlrappointcd by the outcome of3 war despite the official Egyptian portrayalreat victory. Even Egyptians who have been highly critical of th* peace treaty with Israel and of its failure to leadroader peace teem to accept end appreciate thai the treaty has brought Egyptian-Israeli fighting an esuLtfJ^B

Egyptians abo waal to stay out of war* elsewhere in Ihe region, including the Iraq-Iran conflict. Most Egyptians syrrspatbitc wih Iraq but would oppoaa sending combat Uoops. There arc still strongof the Yemeni civil war, in which Egyptian forces sustained heavy casualties. Some Egyptian iBtcUectu-ab abo fear that to fight against Iran exsukl rile Islamic fundamentalistsyp!

The political opposition in Egypt bos been unable to use regional uaues etTectively to weakenopular support, largely because ibe opposition Itself is divided. Leftist parties tried to exploit revulsion over Ihe events in Lebanon last summer by orgarunng pro-Palestinian demonstrations and demandingof the Egyptianfrom Td AvR As os many ether issues, however, the affects ofictivity was limited by their inability to (oin forces with ibe IslamicB

Th* secular parties themielses have divided ever ihe US peace iaiiialive. The incderau Liberal Parly has noted positive aspects of the US plan and teems satisfied with iheesponse to it Th* leftist Socialist Labor Party initiallyimilar approach but later said il could accept no plaa thai was unacceptable to ihe PLO. The Socialist Labor

f

leadership may hare calculated that Ii could score political point* by keeping lu diitance from lb* government on ihb Isaac ladUui ii could not aTford to be outflanked by (he oiber leftist party, tbe National Progressive Unionist OrnuplDg, wbkb baa eauaaatcuUy opposed the US irrruatire. mbk

Detpiie Ibcir divisions, the oppcaitjort parties will continue to serve at gchock oo Mubarak's regional policies by focusing and articulating popular sentiment on issues on which the government could become vulnerable. The Palestine Natioaal Council's endorsement of Egyptianave at lean ihoit-Urm ciKOuiagemcrt to the opposition

figure* who *r. ended the PNC meet lag in Algiers cam back "gleeful" and confident that Mubarak wouldhave to pay greater attention to theii demands. Mubarak's subsequent rebuttal of the Algiershowever, wai wtdgly applauded in Egypt, fa

Domestic politics and opinion so far have notajor independent effect oa the Mubarak govern-meni's regional policies. For the most part, domestic scntiment has tended to reinforce what would have been ihe indie*lions of Mubarak aad bis advisers anyway, sine* they share the Egyptian public's dlsillu-sionmen! with Israeli policies, its desire ia avoid war. md its iatention to returnhe Arab world only on Egypt's terms. In tha one instance la which the

m* irutream of Egyptian public opinion diverged *ig-nilkaBtry from government petscy al (he height of the Lebanonresisted considerable pcattire to take stronger action against Israel aad Muck to li* strategyegotiated peace,

Mubarak's political standing will depend ksa on foreign policy than oa his ability lo resolve Egypt's economic and other domestic problems. Foreigncould canse Mubarak trouble, however, if tbey coincide with internal crises aad help to catalyza popularonversely, progress on Middle East issues would pay him domestic dividends. We bdiave the limited rapr>rochern*Di thai haa already been achocvud with other Arabncluding Mubarak's highly publicized meetings with Arab Leaders at the Nooaligned Summit, has strengthened somewhat bis praation at horns. Any htunklhrough in rifi-Liuitiom with Israel wouldajor boost for Mubarak and would rekindle some of the hopes for a' compeebe/fsive peace that were prevalent in Egypt LmroeCsaiely after Camp David. vaaaaB>

Tha US sea**

The Mabarak fowaancat is relying heavily on Ihe United Stairs to help it attain its regionalarticularly by indnclag Israel to be more flexible Despise theleaders' pessimism about what tits United State* win do to nfuaaare TeJ Aviv.

Egyptian Guv era,

remain convinced Washington can and shouldleverage on the Israelii in order to moveprocess ahead, f"

The Egyptians realize thereimit to US influence over the Begin government and that direct Israeliegotiations probably lie beyond thai Limit.

be oOMterproductive for the "United Sutra to press such negotistwns on Tel Aviv because this would onlyS-Israel: rift and -eaten Washington's uflocne* oa other awestions. Egypt believes that US pressure on the Israelis would be most timely and effective on the issues of withdrawal from Lebanon and teitlement activitye West Bank,

Egyptian leaders have indicated that they also waal tbe United Stales to irnlocstcc Saudi Arabia tomore Io moderate objectives ir, ibe Middle East- Mubarak told US Ambassador to the UNarch that ihc United Slates should persuade the Saudla to urge Hussein and theto agree to negtxiatietu. Other Egyptian officiah have said they would lite Washington to persuade tbe Saudis lo ose their clout with Syris as well In order to get Assad to beructior-si regarding the peace process and the situation in Lebanon.

Mubarak's cautious teoipcrarocrit rrirjftsrces hisnot to make sudden or drastic changes.

Sadat-stytc shock ireutmceL In Mubarak's domestic [wlKtcs, sUbOhy hasendency to muddle through and to avoid bard decisions as long as

Cairo believesore energetic US diplomatic eft on in "the Middle East would complement, notegional leadership role for Egypt.Mubarak's visit toenior Foreign Ministry official observed thai the United Stales now recognizes how important il is for Egypt to use Its contacts with other Arab governments and groups to encourage broader participatiae in the US-sponsored pence

The nature of the US-Egyptian bilateral reUtionship stgn.fican.Uy afTects Cairo's ability to .thieve its regional goals. The Mubarakattstmg

possible.believe thai ibis alio will characterize Mubarak's rtcwoal policy Curing the remainder of tha year, eve* if little progress Is mads toward solution of the Palestinian problem. Neither the US elect -oo "trnft" dot Uraeti aestUmcatthe principal reasons (or Mubarak's tease ofwill compel him to make new decisions by socne specificf doeacetK ceobletni seriously eroded Mubarak's political standing, however, be might be tempted to make tome bold stroke in foreignn effort to ibore op II* popuUnry^|BJB}

Regardless of-Mubarak's domestic standing, wethat he again would coma under domestic and Arab pre sssrs so imposections on Israel If Tel Aviv took some dramatic and provocative action, such as an armed attack against an Arab Mate or formal aaoexaitoo of the West Bank. Given the current state of Egyptian-Uracil relatione, there areew latponscs Cairo couldas intensifying media criticism of Israel orhe tradewould not be clear-cut vinlition* of the peace treaty aad Ihe Camp David accords. We believe thai Mubarak would feel cnrnpeBed to do more than this, even though be has argued repeatedly thatreak the treaty would playhe Begin governmenli hands byo argue thai Arabs do sot warn peace.meat likely response would be to sever diplomatic relations with Telhich is what many Eg)moderate Arab leaders. Including Kingham to do hut summer. Other, less Likely, options would benterrupt oil exports to Israel, bar Israeli ships from the Suez Canal, or move substantial armed forces law tbe demilitarized mors of the Sinai These Utterarticularly any violation of the Sinaicarry the risk of aa Israeli military response Whatever measarc* he took, Mubarak probably wouldtatement of regret that Israel had forced bis bond and of hope that the peace process could be resumed and thelly observed once Tel Aviv changed Its

Jv>.'dis>".

Appendix A

Relations With Radical Arabs

' "TV'.*

leaden have bad Ibe satlsfaction ofcaal Weakening of ibe esssee-swlid front ofArab regimes (and ibe FLO) Ibai kd lie eeoesi-riooamp David. Tha enmity thai Iraq aad the PLO leadership once directed at Egypt baa been dissolved by their aecda for Egyptian military or mptdsratie. asaiitance.rlaiscaa with tbe Beridjedtd gpvefricpeot la Algeria ihow signs of nor-maation, sueb si Ihe recent resumption ofair service between Algiers aad Cairo. Egypt still lacks any relations with the Marxist South Yemeni regime,s peripheral Io Egypt's principal re-giooal cooccrns. Only Libya and Syria remainArab adversaries of Egypt in lbs aeaae that they are effectively vetoing Egypt's reintegratioc. into Arab ranks and taking other actions that jeopardize Egypt'* regional

Libya does notlgnificani direct threat togypt, but Egyptian leaders frequently have indicated cesacern about Libyan subversive and military aotrvi-lies elsewhere In North Africa, particularly ia Sudan and,esser extent, Chad. In the exchanges with Odbefii emissaries, Ihe Mubarak government baa stressed that It would not allow Ubyan-spoaaored subversion to threaten Nimciri'i regime. The coup plot that was exposed la February dimmed what Utile chance there was for bngmxnseni inrelations, since It lad: the Libyan media to resume abusive criticism of Mubarak for the first

but io make no conuniinscnu

Egyptianhas concludedapprochcmeol at this time would benefit tbe Libyan leader more than ii would Egypt. Talks between low-Jevd military represem^trves, fcow-ever^rtgularly take place along tic border. JHajkassss,

Egypt's relations with Syria are even worse iban with Libya. Syrian media have Ucesaarrtiy oiticizedleaders, and Damascus so far has remained implacably opposed to Egypt's policy of continuing and rxrxsdening ibe peace process. Syria has declared Ihsl Cairo must discardhackles" of its ties to Ihe United States and Israel before il can be accepted back into Arab

tt-

ApperjdsX

Cooperation With Moderate Arabs

Despite severed diplomatic rclatiooa. Egypt'* political, economic, and military tic* with meat Arab coaatria* are significant and growing. Egypt ha* Interest ssc-troai In sR Arab capitals eiccpt Ad*n, Damatcot, and Tripoli. Diplomatic contact it maintained Ibrongh these missioos, through the Arab states' interest sections in Cairo, and through officialubarak has communicated with other Arab leader* indirectly by special envoy and bu me! litem personally at Saudi King Khabd's funeral In2 and at (he Noaallgncd Summit ia New Delhi dab March. Al New Delhi ha head talk* with Hussein. Gemayel.

Q*boos. end tb* *mlr*r*in, Kuwait, and-:

1economic assistance to Egyptest, hut trad* aad tnesrbm bars decreased onlysince their*eli peace treaty. International v

eapoets to Arab League1S milCbri' down1ear of Camp David. Import* frees (he Arab connirses during the same period declined from SIilhoelDioa, Egypt ha* copedhe Arab boycott by designaUng coK^rawing ccanpany and one bank to handle most dealing,

Brgefjiats Egyptianeat of whom arc in Iraq *nd the Arabiaa Penintula countries, are an Important ecnnomk and human link between Egypt and other-Arabtni^Egyptiaa ceTkaal

Egyptians in

tCfilella million Foreign employment of these workers has helped Egypt to export surplus labor and to earn foreign exchange ando Mad tbe boat counuie* to meet ktbor shortages in caL coeitructioa. and otherhe demand for (heir acrrke* may be decssnang.as the coonomics of the oil-producing countriesraq recently reduced the proportion of earnings that foreign worker* can aend banc, end Kuwaitp on the issuance of residencet

Secret

Egypt hit bean furnishing limited military lid to Somalia, including used Soviet-made arms. Wesuch aid to continue, although Cairo') main efforts ia the Horn of Africa currer-'y are directed towardettlement of I Ethiopian-Somali conflict. Egypt isprove itsl at iocs withsouf most of the Nile water that flows through Sudan andto draw the Mengistu regime away from the Soviet orbit.t

Among the Arab states that lack formal diplomatic tics with Egypt, Jordan and Morocco arc thosein addition to Lebanon andcooperating most closely with Cairo. The rapid development of Jordaniaa-Egyptian relations over (he lastonths is an outgrowth of efforts to brm] Amman into the peace prxeas. Warmer Egyptian-Jordanian relations have become apparent In several ways, in addition to (he frequent consultations on peace-related issues. Jordan permits the sale of Egyptian books snd has agreed to share televisionilateral trade agiccment also has been reached, with Jordan dropping restrictions on all Egyptian firms that do not trade with Issocl. smjngj

Morocco has been one of the most vocal supporter* of closer Arab-Egyptianartly because il value* Egyptian tuppoit on the Westernra question snd because it would welcome additional moderatein Arab councils. Egyptian-Moroccan political end security cooperation is extensive.I

taut

bin has relaxed restncTTonTon inveiirhcnt in Egypt, and the flow of private funds has resumed to some extern. 1

Toe Saudis probably still harbor some resentment over the insults thai Sadat threw at (hem after the Arabs split with Egypthe public tone of Saudi-Egyptian relations, however, has improved over the past few month*.

newspapers nave oeen cm-ing Egypt's support for the Iraqi wsr effort, and they favorably portrayed Mubarak's (rip to (heS(alet. Ai (he Nonallgnet! Summh.'Saudi Foreign Minister Sa'ud noted (he Egyptian-Arab contacts thai already were taking place snd expressed hope for further imp rove man (In relations, j

The smaller Persian Gulf stain clearly favor closer relation! with Cairo, partly because they arein obtaining Egyptian help to counter Iranian orr^'A^MMBgMntaiiswBwB

offered fJHg^ tory personnel to the Oulf slates if Iran Invaded Iraqi territory. We believe, however, that Egyptian aid to the Gulf states prooably will remain limited toand that thstates would be unlikely to request Egyptian combat troops unless these states

were in imminent danger of foreign Invasion. Several

of the Gulf states requested additional advisoryfrom Egyptisit in January by the

chief of Egyptian military intelligence, according to a

fairly reliable Arab source

Trade and Investment (iss between Egypt and (he Persian Gulf countries are gradually being restored, particularly in (he private sector. Businessmen from the Gulf slates have formed an Arab Gulf Investment Company, which has headquarters in Cairo and is Intended to stimulate Arab investment in Egypt Egyptian officials warmly received companylast June andong list of projects

ft*nding. Official financial tics withot been repaired so

Gulf rule

cJTiciab have expressed interest In rauraingin the Arab Organization for

"fa^lhcr withdrew after toe Egyptian-Israeli

peace treaty.

Relationi between Egypt and nonhyemtn have riajbly Improved In recent roooths.l

The principal Impediment to further develcpcoenl of Egyptiao-PLO reUUoas Is Arafat's needvoid aa Open split with Palestinian radicals, some of whom Implacably oppose the Mubarak government. Radical Influence was reflected In the natemeat on relation* with Egypt that the Palestine National Council issued ia Algiers In February. The Council called oa Cairo to abandon the Camp David accords aad spoke ofnurturing relations with Egyptian "national forces.**n apparent rtfercwee to Egyptian opposition groups. The statement Infuriated Mubarak, who publicly denounced the PLO leadership for interferinggypt's internal affairs and avoided contact with PLO officials at the Nonaligned Summit. This quarrel has dampened speculatkio that Arafat might soon visit Cairo aad probably added to Egyptian doubts about the PUT* ability to reach ssreemeot with King " "

PLO

. to Cairo alter the Algiers-

meetbag wers harshly critidxrd by Egyptian officii Is -We do not believe, however, that these frictions will lead Cairo to abandon hope of bringing the PLO ai least Indirectly into tbe peace* " Egyptian Foreign Mini

the Algiers OcciaratKi

. c icly for Internal consumption.

warmer than it any time tincc thea rid accords. Tbe PLO leadership appreciatedangibk aatastarsee that Egypt previoed, such aa'a

COtTimunicarioas link bei -eco Beirut and.Arafat has aaid that be will never forget the sioo" be fch from Egypt at the height en* theAlrJtoBgh Cairo refeacd to accept any of thertgbten trapped in West Bc.li.ji. Arafat andleaders eneUssiood tha reasons behind "

^thWtbhaveUken in'the Palestiniansan overall peaoe settlement would merely

lid act want to expose

n

the bvsilon Lebanon.^

.**

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