Exodus to Egypt? Why African migrants marched on Israel’s border

For two years, Israel’s government has been encouraging its population of African migrants to leave the country.

But when 1,000 Eritreans and Sudanese marched on Israel’s southwestern border on Friday, they couldn’t get through to Egypt. After two days of camping out in protest on the border, the hundreds who remained were arrested Sunday by Israeli authorities and placed in prison.

“We are a state,” Interior Ministry spokeswoman Sabin Haddad told JTA. “To just go to the border and cross, you can’t do that. Whoever wants to leave needs to do it according to protocol.”

When it allows migrants to leave, Israel will only permit their return to their home countries — where they would face repressive regimes — or to one of a few third-party countries whose identity Israel has declined to publicize. Israel provides grants of $3,500 to those who leave.

For those who remain in Israel, the government has built a detention facility near the Egyptian border, called Holot, that now houses more than 2,000 people. Detainees receive food, shelter and health care, but their freedom of movement is restricted as they must stand for roll call three times daily. The detainees have no release date. Failure to show for roll call, or refusal to answer the summons to Holot, are punishable with prison time.

“It was horrible to be in Holot and to be in prison,” said Philemon Rezene, 26, an Eritrean chosen to represent the protesters at a Tel Aviv news conference Sunday. “They had a very miserable life. There was a shortage of food, a shortage of sanitation, a shortage of medical care. They were always under strict control. They wanted at least to be free in an open area.”

The migrants’ march on the border is the latest stage in their conflict with the Israeli government. The migrants are seeking asylum from Eritrea and Sudan, which are ruled by repressive regimes.

But Israel says they are economic migrants seeking a higher standard of living, and it fenced off its border with Egypt in 2012 to prevent future migrants from entering. Anyone who crosses Israel’s border illegally now faces a year in prison.

Last year, Israel approved the financial grants for voluntary departure and opened the Holot facility. Approximately 3,000 out of Israel’s African migrant population of 60,000 have chosen to voluntarily depart.

Chafing at their restrictions, the detainees who marched toward the Egyptian border last week aimed to cross into Egypt and wait there for assistance from the United Nations high commissioner for refugees, according to Liat Bolzman, an Israeli who accompanied them.

Blocked by Israeli border guards, the protesters set up camp on the border, sheltering themselves with sheets, and surviving on food and water brought by supporters.

Two days after the initial march, units of Israeli immigration police and border guards forcibly dispersed the camp and sent the remaining protesters to Saharonim Prison, next to Holot. Bolzman said six protesters were injured during the operation.

“They were ready to cross,” she said. “It’s better than sitting in the detention center for they don’t know how much time. They said we can’t live like this anymore, we’re ready to take this risk and cross the border rather than be here.”

But though the migrants say they are fed up with Israel, crossing the border and receiving U.N. help in Egypt may not be realistic.

Egypt’s Sinai Peninsula is known among migrants for harrowing stories of kidnapping and torture. And the representative in Israel of the U.N. high commissioner for refugees said that migrants who cross the border without proper documentation should not expect prompt assistance from the United Nations.

“In order to make this possible, you can’t just start marching for the border,” said the representative, Walpurga Englbrecht, while also urging Israel to improve conditions for migrants. “You cannot just assume everything will be arranged at the end if there are no arrangements made beforehand. If you go to another country, you need a passport. You need an entry visa.”

Anat Ovadia, spokeswoman for Israel’s Hotline for Migrant Workers, an aid organization, suggested that the goal of the march was more to gain Israeli sympathy for the migrants, not for them to cross the border.

“This step was a protest step to get Israel’s attention and get U.N. attention,” Ovadia said. “It’s a testament to how much Israel is despairing them.”

Obama expresses deep concern to Egypt’s Morsi about violence

U.S. President Barack Obama called Egyptian President Mohamed Morsi on Thursday to express his “deep concern” about the deaths and injuries of protesters in Egypt and said dialogue between opposing sides should be held without preconditions, the White House said.

“The president emphasized that all political leaders in Egypt should make clear to their supporters that violence is unacceptable,” the White House said in a statement.

“He welcomed President Morsi's call for a dialogue with the opposition, but stressed that such a dialogue should occur without preconditions. The president noted that the United States has also urged opposition leaders to join in this dialogue without preconditions.”

Morsi called on Thursday for a national dialogue after deadly clashes around his palace.

“(Obama) reiterated the United States' continued support for the Egyptian people and their transition to a democracy that respects the rights of all Egyptians,” the White House statement said. “The president underscored that it is essential for Egyptian leaders across the political spectrum to put aside their differences and come together to agree on a path that will move Egypt forward.”

Reporting by Jeff Mason, editing by Stacey Joyce

More demonstrations in Tahrir Square against Morsi power grab

Police fired tear gas and beat demonstrators as large-scale protests in Cairo's Tahrir Square continued over Egyptian President Mohamed Morsi's power grab.

Many young protesters were arrested Wednesday on the second straight day of demonstrations in and near the square. On Tuesday, more than 200,000 people gathered at the site of demonstrations in February 2011 that led to the ouster of President Hosni Mubarak.

At least one protester has died in this week's demonstrations.

Mass protests also are being held in other cities and are comparable in size to the uprising that turned Mubarak out of office, according to Reuters. The protests have expanded to decrying Morsi's Islamist Muslim Brotherhood Party as well.

Morsi announced on Nov. 22 a consolidation of power, including that Egyptian courts would not be permitted to overturn any laws or decrees he has issued since assuming the presidency in June — at least until a new constitution is presented and approved in about six months.

Morsi earned praise from the United States and the international community last week after Egypt brokered a cease-fire between Hamas and other terrorist organizations in Gaza and Israel, ending more than a week of escalated warfare.

Egypt Islamists expect gains in post-Mubarak poll

Egyptians voted on Tuesday in a parliamentary election that Islamists hope will sweep them closer to power, even though the army generals who took over from President Hosni Mubarak have yet to step aside.

The election, the first since a revolt ousted Mubarak on February 11, unfolded without the mayhem many had feared after last week’s riots against army rule in which 42 people were killed.

General Ismail Atman, a ruling army council member, said he had no firm figure, but that turnout would exceed 70 percent of the 17 million Egyptians eligible to vote in the first round that began on Monday. “I hope it will reach more than 80 percent by the end of the day,” he told Al Jazeera television.

Atman was also quoted by Al-Shorouk newspaper as saying the election showed the irrelevance of protesters demanding an end to military rule in Cairo’s Tahrir Square and elsewhere.

Les Campbell, of the Washington-based National Democratic Institute, one of many groups monitoring the poll, said earlier it was “a fair guess” that turnout would exceed 50 percent, far above the meager showings in rigged Mubarak-era elections.

The United States and its European allies are watching Egypt’s vote torn between hopes that democracy will take root in the most populous Arab nation and worries that Islamists hostile to Israel and the West will ride to power on the ballot box.

They have faulted the generals for using excessive force on protesters and urged them to give way swiftly to civilian rule.

The well-organized Muslim Brotherhood, banned but semi-tolerated under Mubarak, said its political wing, the Freedom and Justice Party (FJP), had done well in the voting so far.

“The Brotherhood party hopes to win 30 percent of parliament,” senior FJP figure Mohamed El-Beltagy told Reuters.

The leader of the ultra-conservative Salafi Islamist al-Nour Party, which hopes to siphon votes from the Brotherhood, said organizational failings meant the party had under-performed.

“We were not dispersed across constituencies, nor were we as close as needed to the voter. Other parties with more experience rallied supporters more effectively,” Emad Abdel Ghafour said in the coastal city of Alexandria, seen as a Salafi stronghold.

But he told Reuters the party still expected to win up to half of Alexandria’s 24 seats in parliament and 70 to 75 nationwide out of the assembly’s 498 elected seats.

Abou Elela Mady, head of the moderate Islamist Wasat Party, made no predictions, but praised the turnout and said the party would accept the result despite electoral violations.

Soldiers guarded one banner-festooned Cairo voting station, where women in Islamic headscarves or Western clothes queued with their families. Judges kept an amiable eye on proceedings.


Islamists did not instigate the Arab uprisings that have shaken Tunisia, Egypt, Libya, Syria and Yemen, but in the last two months, Islamist parties have come out top in parliamentary elections in Morocco and post-revolutionary Tunisia.

Egyptian Islamists want to emulate those triumphs, but it is unclear how much influence the previously toothless parliament in Cairo can wield while the generals remain in power.

If the election process goes smoothly, the new assembly will enjoy a popular legitimacy the generals lack and may assert itself after rubber-stamping Mubarak’s decisions for 30 years.

“Real politics will be in the hands of the parliament,” said Diaa Rashwan, an Egyptian political analyst.

One general has said parliament will have no power to remove an army-appointed cabinet due to run Egypt’s daily affairs until a promised presidential poll heralds civilian rule by July.

The army council assumed Mubarak’s formidable presidential powers when it eased him from office on February 11. Many Egyptians praised the army’s initial role, but some have grown angry at what they see as its attempts to retain its perks and power.


The election is taking place in three regional stages, plus run-off votes, in a complex system that requires voters to choose individual candidates as well as party lists. Full results will be announced after voting ends on January 11.

Election monitors have reported logistical hiccups and campaign violations but no serious violence.

Armed with laptops and leaflets, party workers of the Muslim Brotherhood’s political wing and its Islamist rivals have approached muddled voters to guide them through the balloting system and nudge them toward their candidates.

In the Nile Delta town of Kafr el-Sheikh, Muslim Brotherhood workers were selling cut-price food in a tent where they also distributed flyers naming the FJP candidates in the area.

Some Egyptians yearn for a return to stability, uneasy about the impact of political turmoil on an economy heading toward a crisis sure to worsen the hardship of impoverished millions.

Others worry that resurgent Islamist parties may dominate political life, mold Egypt’s next constitution and threaten social freedoms in what is already a deeply conservative nation of 80 million people whose 10 percent Coptic Christian minority complains of discrimination from the Muslim majority.

Copts, like Muslims, were voting in greater numbers than in the Mubarak era. “Before, the results were known in advance, but now we have to choose our fate,” said Wagdy Youssef, a 45-year-old company manager in Alexandria.

“Copts like others want civilian rule,” he said. “I voted for Muslims because they represented moderate views and stayed away from a few Christians on the lists I saw as extremist.”

As voting resumed in the chilly, rain-swept coastal town of Damietta, Sayed Ibrahim, 30, said he backed the liberal Wafd Party over its main local rival, the Salafi Nour Party.

“I’m voting for Wafd because I don’t want an ultra-religious party that excludes other views,” he said, in jeans and a cap.

Additional reporting by Marwa Awad in Alexandria, Shaimaa Fayed in Damietta and Tom Perry, Patrick Werr, Peter Millership and Edmund Blair in Cairo; Writing by Alistair Lyon; Editing by Peter Millership

Three U.S. students held in Egypt over protests

Three U.S. students were paraded on Egyptian television on Tuesday after being accused of throwing petrol bombs at police during protests near Cairo’s Tahrir Square where demonstrators have been demanding an end to military rule.

State television did not give their identities, describing them as “foreigners.” But the U.S. embassy confirmed that three U.S. citizens were being detained and the American University in Cairo said three U.S. students studying there had been held.

Egypt’s state television cited an Interior Ministry official as saying that the three had been detained after they threw petrol bombs at police protecting the Interior Ministry. It said the identities of the three were being established.

It showed pictures of three with their backs against a wall and looking at the camera. One person out of shot raised the head of one of the Americans with his hand to ensure he looked straight ahead.

It showed videos, taken by phone cameras, that it said showed the three taking part in the protest at night. One of the people in the picture wore a medical face mask that many protesters have been using to protect against teargas. Another had a headscarf around his mouth.

“Three of our American study-abroad students, Gregory Porter, Luke Gates and Derrik Sweeney, were arrested last night. We are in touch with their families and are working with the U.S. embassy and the Egyptian authorities to ensure that they are safe,” the American University in Cairo said.

“We have been able to determine that they are being held at Abdeen’s public prosecutor’s office,” it said in a statement that was e-mailed to alumni of the university.

The U.S. embassy also confirmed the detention.

“We have been in contact with the Egyptian authorities and can confirm that there are three U.S. citizens in detention in connection with the protest. We have requested consular access,” a U.S. embassy spokeswoman said.

She said the embassy expected to be granted access on Wednesday.

Additional reporting by Dina Zayed; Writing by Edmund Blair

Arab unrest alters power balance in as yet unseen ways

They were the devils they knew.

Though Israel lives in a dangerous neighborhood, surrounded by countries whose leaders or people wish its destruction, over the years it had adjusted to the status quo, more or less figuring out how to get by while keeping an eye on gradual change.

But the sudden upheaval in the region that in a matter of weeks has toppled regimes in Tunisia and Egypt, and threatens autocrats in Libya, Yemen, Bahrain and elsewhere, is forcing Israel to grapple with how to recalibrate for dramatic change.

For the time being, as Israel sits and watches how things play out from Tripoli to Manama, Bahrain, it’s not clear exactly how the game will change.

“The best answer is we don’t know,” Ron Pundak, the director of the Peres Center for Peace in Herzliya said this week at the J Street conference in Washington.

“The biggest change since 1967 is this tsunami rolling across the region whose end results no one really can foresee,” said Samuel Lewis, a former U.S. ambassador to Israel who attended the conference. “Something new is happening in the Arab world.”

In some places, like Libya, the immediate effects on Israel are minimal. Libyan strongman Muammar Gadhafi’s state has had no ties to Israel, so the dictator’s demise—if it comes—wouldn’t change much for Israelis.

“The civil war raging in Libya poses no immediate cause for concern in Israel,” Israeli journalist Avi Issacharoff wrote in Haaretz.

However, the cumulative effects of the Middle East unrest are prompting shifts throughout the region that may require dramatic strategic rethinking in the Jewish state.

Every time a protest movement in the Middle East succeeds, protest movements elsewhere are emboldened, and that has put many regimes that for decades have not been hostile to Israel—including those of the Persian Gulf, Jordan and North Africa—on alert and at risk.

With Israel and the West engaged in a proxy war with Iran for regional hegemony, the fall of autocratic regimes allied with the West provides an opening for Iran to expand its power and sphere of influence.

And Iran is intent on doing so. It was no accident that just days after the fall of Egypt’s Hosni Mubarak, Tehran dispatched two warships to sail through the Suez Canal—something Iran had not dared to do since the 1979 Islamic Revolution. The ships docked in Syria in what Iran’s Navy chief, Rear Adm. Habibollah Sayyari, described as “a routine and friendly visit” to “carry the message of peace and friendship to world countries.”

In truth, it was an exercise in saber rattling.

Iran is projecting “self-confidence and certain assertiveness in the region,” Israeli Defense Minister Ehud Barak told CNN. Nevertheless, he said, “I don’t like it, but I don’t think that any one of us should be worried by it.”

When a pair of rockets fired from Gaza hit the Israeli city of Beersheba last week, some Israeli analysts saw it as another example of Iran’s saber rattling. Iran has sent weapons to Gaza and seeks more influence there, even though the strip’s Hamas rulers are Sunni Muslims, and Iran is a Shiite power.

“I do not recommend that anyone test Israel’s determination,” Israeli Prime Minister Benjamin Netanyahu said after the rocket attack.

The great fear is that regimes friendly toward Israel (Egypt, Jordan), or friendly with Israel by proxy via the United States (Saudi Arabia, Bahrain), or not actively hostile (Libya, among others), will be co-opted by elements with greater animus toward the Jewish state.

That hostility could come from any one of a number of places. On the Egyptian front, the long-outlawed Muslim Brotherhood, an ally of Hamas, stands to gain greater power. In the cases of Tunisa and Libya, there is fear that al-Qaeda could capitalize on a power vacuum and take root. In Bahrain, which is overwhelmingly Shiite but ruled by a Sunni king, the concern is that genuine democracy could throw the country the way of Iran.

“The regional balance of power is changing, and not necessarily in Israel’s favor,” Robert Serry, the U.N. secretary-general’s special coordinator for the Middle East peace process, said at the J Street conference.

But there could be some good news, too. The uprisings that have spread from North Africa to the Persian Gulf have been broad-based, loosely organized protest movements led by young people networking through the Internet and social media like Facebook. They have not been dominated by Islamists, and the protesters have not made Israel a focal point.

Whether these young people really will take hold of the levers of power, and how they will relate to Israel in the future, are open questions.

For those concerned with Israel, the unrest is being interpreted one of two ways, depending largely on political leanings. Those on the right point to the instability as a reason for Israel to be more wary of concessions in any peace agreements, since their peace partner could disappear at any time.

“Why should Israel expect that another agreement would not be overturned by some new revolution, change of mind or cynical long-term plan?” columnist Barry Rubin wrote in The Jerusalem Post.

Those on the left say that if Israel does not resolve the Israeli-Palestinian conflict quickly with a peace deal, the new generation of leaders emerging in the Arab world won’t be able to see Israel as anything other than an occupier and repressor of Palestinian rights. Arab commentators echo that thinking.

“The hatred of Israel will not end until you start treating Palestinians with freedom and dignity,” Egyptian journalist Mona Eltahawy said at the J Street conference. “This is the time for Israel to sit down and make concrete concessions.”

In Jerusalem, the government is still in the wait-and-see mode, albeit with as much handwringing as possible.

Israeli Deputy Foreign Minister Danny Ayalon, speaking Tuesday in Brussels, warned that the danger is that democracy movements in the Arab world will be “hijacked,” emulating the “model of Iran, the model of Hamas in Gaza, the model of Hezbollah in Lebanon,” according to the German news agency DPA.

Ayalon also said the unrest in the Arab world demonstrates that the notion of the Arab-Israel conflict being the region’s most serious issue is just not true.

“The real major problem of the Middle East, which is now so glaringly evident, is the dysfunctionality of the Arab societies,” Ayalon reportedly said, noting the absence of “rights of any kind.”

Yemen’s president: Israel planned, funded Arab uprisings

Yemen’s president, Ali Abdullah Saleh, blamed Israel for planning and funding protests in several Arab states.

“There is an operations rooms in Tel Aviv with the aim of destabilizing the Arab world,” Saleh reportedly said Tuesday during a speech at Sanaa University, adding that the operations room is “run by the White House.”

“The wave of political unrest sweeping across the Arab world is a conspiracy that serves Israel and the Zionists,” he also said.

Yemen has been the site of anti-regime protests for the past two weeks—one of several Arab countries in which protesters have attempted or succeeded in deposing their rulers.

Saleh, who has ruled Yemen for 32 years, has rejected calls to step down.

Yemeni opposition leaders rejected an offer for a unity government on Monday. Some 24 people have died in the violence.

Saleh has promised to step down when his term ends in 2013 and that his son would not seek the top job.

Amid unrest, rethinking $1.3 billion in annual U.S. aid to Egypt

The consensus on U.S. assistance to Egypt is that it has delivered bang for its buck: The $1.3 billion in annual defense aid has stabilized a key ally and strengthened America’s profile in the Middle East.

But in the wake of massive unrest that could unseat Egypt’s autocratic leader, the question now emerging is whether sustaining the aid to the current regime would advance a democratic agenda or squelch it—or whether that should be an American concern at all.

The Obama administration, speaking after the outbreak of the protests, initially said it would “review assistance” to Egypt. But now the White House seems to be quietly backtracking as long as Egyptian President Hosni Mubarak’s regime transitions toward greater democratic freedoms.

It is a debate that pro-Israel groups will be watching closely.

Assistance to Egypt is rooted in the 1979 Israel-Egypt peace deal and has become a cornerstone of preserving the quiet along Israel’s southern flank. The question that Israel and its allies in Washington will be considering as the Egyptians shape a new government is whether continuing such assistance sustains the peace treaty or bolsters its detractors, chief among them Egypt’s Muslim Brotherhood.

In a paper anticipating such considerations, the Congressional Research Service said last week that the day might finally have come to recalibrate assistance to Egypt, which for more than 30 years has gone mostly to the military.

“The unrest of January 2011 suggests that the terms of recent debate over U.S. assistance to Egypt may change significantly in the coming months,” the paper said. “Although U.S. assistance has helped cement what many deem to be a successful 30-year Israel-Egypt peace treaty, as time has passed, critics of continued U.S. assistance to Egypt have grown more vocal in arguing that U.S. aid props up a repressive dictatorship and that, to the extent that any U.S. funds are provided, policymakers should channel them toward supporting opposition or civil society groups.“

The problem with that formulation, said Graham Bannerman, who for years lobbied for U.S. assistance to Egypt, is that it ignores how deeply woven the military is into Egyptian life.

“They are the ultimate preserver of life and stability,” he said, noting the army’s role in calming protests in recent days and separating antagonists.

Egypt’s access to U.S. hardware and training elevates its profile as an Arab leader—a status that Egyptians of all political and social stripes embrace, Bannerman said.

“The army has a role in the region; a competent military force improves your political standing,” he said. Forcing Egyptians to replace democracy with military assistance is “like the Boy Scout walking the old lady across the street when she doesn’t want to so he can get a merit badge.”

According to the Congressional Research Service report, the $1.3 billion in U.S. aid to Egypt is split into three categories: acquisitions, upgrades to existing equipment and follow-on support/maintenance contracts. The U.S. money accounts for as much as 80 percent of Egypt’s procurement power, CRS estimates. Bannerman said that translates into major acquisitions such as aircraft, tanks and ships, as well as training.

As upgrades and support become more and more expensive, and the $1.3 billion remains stagnant, that effectively means aid to Egypt is shrinking, CRS notes. By contrast, military aid to Israel—scheduled to reach $3 billion this year—rises commensurate with cost increases.

The assistance to Egypt, along with years of training by and alongside U.S. forces, has created a military loyal to U.S. interests, analysts say. For U.S. forces, Egypt waives the restrictions on traveling the Suez Canal that are imposed on other nations. Without Suez access, the United States might otherwise have to double its naval presence around Africa, Bannerman said.

The Congressional Research Service report points out such benefits.

“The U.S. Navy, which sends an average of a dozen ships through the Suez Canal per month, receives expedited processing for nuclear warships to pass through the Canal, a valued service that can normally take weeks otherwise required for other foreign navies,” it said. “Egypt also provides over-flight rights to U.S. aircraft.”

The signature U.S. military assistance to Egypt is the co-production of the Abrams tank in Egypt, in place since 1988. Some parts are manufactured on the outskirts of Cairo, and the product is assembled there. Egypt plans to buy a total of 1,200 tanks, CRS says.

The program, combining defense spending with jobs creation in Egypt, is typical of how the Egyptian army functions—not just as a defense force but as a major property owner and public employer.

Robert Springborg, an Egypt expert at the U.S. Naval Postgraduate School in Monterey, Calif., told National Public Radio this week that the Egyptian army has its hands in manufacturing automobiles, building infrastructure, clothing, kitchen appliances, tourism and a range of other areas.

U.S. money does not fund such ventures but helps facilitate them.

The pervasiveness of the military in Egyptian life has net positives and negatives, according to U.S. diplomats. A 2008 memo from the U.S. Embassy in Egypt notes that “the military still remains a potent political and economic force,” and praises its role in producing bread to meet shortages and “sometimes can successfully step in where other government agencies fail,” which ensures stability.

It also said, however, that the military’s power has diminished in recent years, rendering it vulnerable to corrupt overtures of co-option by Gamal Mubarak, the Egyptian president’s son and until last month his designated heir.

That complex interface and a natural American tendency to kick against militarized societies in the past have led to congressional efforts to move funds from military assistance to democratization.

In 2008, Rep. David Obey (D-Wis.), then the chairman of the Appropriations Committee of the U.S. House of Representatives, led the passage of such a law, but the Bush and Obama administrations have waived it.

Rep. Ileana Ros-Lehtinen (R-Fla.), another advocate of moving military assistance earmarks to democracy development, is now in a position of influence. As the newly installed chairwoman of the House Foreign Affairs Committee, she scheduled two days of hearings this week on assistance to Egypt and Lebanon.

Ros-Lehtinen once was an advocate of moving funds to democratization.

It is “incumbent upon us to assess United States aid to Egypt, and find effective solutions to resolving the freedom deficit there while providing for our security priorities and ensuring regional stability,” she said at a 2006 hearing.

Now, watching the developments unfold, Ros-Lehtinen has yet to say where she stands on military assistance, but she has suggested its continuance depends on a government dedicated to bottom-line U.S. agenda items, including support for Israel.

Last week, she said that “Opposition leaders must categorically reject the involvement of extremist elements who are trying to use this crisis to gain power, hijack Egypt’s future, and seriously damage Egypt’s relationship with the United States, Israel and others.”

Egyptian unrest stokes oil fears, but Mideast markets relax

Investors began separating the losers and the gainers from Egyptian unrest on Wednesday, as fears the turmoil would interrupt the world oil trade lifted petroleum prices to their highest level in more than two years while share markets in the Middle East rebounded.

The price of North Sea Brent crude futures held above $100 a barrel on Wednesday and just below the 28-month high they reached a day earlier, amid concerns the standoff between Egypt’s government and the opposition might close the Suez Canal. Investors also remained jittery about the risk of unrest spreading to the Middle East’s oil exporters.

But the bad news for oil consumers was greeted joyfully in Gulf Cooperation Council (GCC) countries, which sit on top of the world’s largest reserves. Investors also assessed that the protests that have shaken Egypt and Tunisia would probably not spread to the Gulf. GCC share prices rebounded.

“There were obviously some concerns of the region due to Egypt, but I think those are relatively limited,” Giyas Gokkent, chief economist at National Bank of Abu Dhabi, told The Media Line. “The overall impact of the turmoil in Egypt on the GCC economies will be relatively limited. Investors have come back. They’re saying, ‘We were being premature. Let’s reconsider.’”

The Dubai Financial Market General Index posted its largest gain in ten months, rising 3.3%, while Abu Dhabi’s ADX General Index jumped 1% and Saudi Arabia’s Tadawul All Share Index closed up 2.2%, the highest in a week. Gokkent said it was local investors who were the most bullish.

“From what we’ve seen so far, it’s mostly local investors mostly participating in the current uptick,” he said. “In terms of foreigners, they probably want to see things settle
While protests continued in Egypt on Wednesday, Gulf investors were cheered by President Husni Mubarak’s decision not to seek another term in office, a move some said may go far enough in the direction of change to bring about an end to the unrest, which marked its ninth day on Wednesday.

In a televised address late on Tuesday, the Egyptian leader said he would not seek re-election in September. The move failed to satisfy the opposition, which continued to demand that he step down immediately, but in the first show of support in the street for the government, some 20,000 Mubarak supporters marched on Tahrir Square on Wednesday, swamping the opposition presence.

Even in Israel, which regards the Egyptian leader as one of its closest friends in the Middle East and a bulwark against Islamic radicalism, the Tel Aviv Stock Exchange’s TA-25 index closed 0.9% higher.

But not everyone was convinced that the threat from Egypt is over. Nassib Ghobril, chief economist at Beirut’s Byblos Bank, told The Media Line that investors were unnerved by the sudden eruption of the protests in Egypt, and weeks before that in Tunisia. Even though the contagion they feared hasn’t occurred, they fear further surprises.

“Egypt has been a stable country for many years. Frankly, with this kind of rapid and unexpected change it’s normal to have investors squeamish because the level of uncertainty,” he said. “After what has happened in Tunisia and Egypt, investors will definitely take into consideration more political risk than they had done previously.”

In Egypt, the economy remained at a standstill. The Central Bank refused again on Wednesday for the third day to allow banks to open for fear they might be looted. Most automatic teller machines are empty of cash. Even the shut-down of the Internet, aimed at disrupting the opposition, has hurt business. Moody’s and Standard & Poor’s, the world two biggest credit rating agencies,  downgraded Egypt this week.

Egypt’s newly appointed finance minister, Samir Radwan, told BBC Radio 4 that the country’s economy had been damaged by unrest, but he denied it had been plunged into chaos. “There is a crisis; there is no doubt about it. Certainly I wouldn’t deny that the economy has suffered,” he said.

Oil traders are concerned about the impact Egypt’s closing the Suez Canal would have because the transit route carries 7% of world trade, including some 1.8 million barrels of oil daily. Without the Suez shortcut, the price of shipping oil from the Gulf to markets in Europe and North America would rise, adding to energy costs.

In addition, Arab investors have considerable investments in Egypt, including real estate, banks, Byblos’ Ghobril said. Egypt is the Arab world’s third-largest economy, counting for 11.5 of its gross domestic product.

But most analysts said the main threat Egypt poses is political. At $188 billion in current dollars in 2009, Egyptian economic output is about the same size as that of Alabama. “It doesn’t have the same magnitude as a political event that impacts on the GCC directly would have,” Gokkent said.

Tension erupting

Unrest in Egypt could lead to Israel’s worst nightmare

For Israel, the popular uprising against the Mubarak regime raises the specter of its worst strategic nightmare: collapse of the peace treaty with Egypt, the cornerstone of its regional policy for the past three decades.

That is not the inevitable outcome of the unrest; a modified version of the Mubarak government could survive and retain the “cold peace” with Israel. But if, in a worst case scenario, democratic or Islamic forces were to come to power denouncing Israel and repudiating the peace deal, that could herald the resurrection of a major military threat on Israel’s southern border.

The largely American-equipped and American-trained Egyptian army — by far the most powerful military in the Arab world — numbers around 650,000 men, with 60 combat brigades, 3500 tanks and 600 fighter planes. For Israel, the main strategic significance of the peace with Egypt is that it has been able to take the threat of full-scale war against its strongest foe out of the military equation. But a hostile regime change in Cairo could compel Israel to rethink its military strategy, restructure its combat forces, and, in general, build a bigger army, diverting billions of shekels to that end with major social and economic consequences.

A hostile government in Cairo could also mean that Egypt would be aiding and abetting the radical Hamas regime in neighboring Gaza, rather than, as at present, helping to contain it.

Worse: If there is a domino effect that also leads to an anti-Israel regime change in Jordan, with its relatively large Islamic political presence, Israel could find itself facing an augmented military threat on its eastern border, too. That could leave it even worse off than it was before 1977, facing a combined military challenge from Egypt, Lebanon, Syria, Jordan and the Palestinians—with the added menace of a fundamentalist Iran that seeks to acquire nuclear weapons.

The strategic importance of the peace with Egypt has come to the fore during a number of crises over the past decade. Without it, the Second Palestinian Intifada (2000-2005), the Second Lebanon War (2006) and the Gaza War (2008-2009) could easily have triggered wider regional hostilities. But in each case, in the teeth of regionwide popular sentiment against Israel, Egyptian President Hosni Mubarak adamantly rejected calls to commit Egyptian soldiers to the fray. On the contrary, Mubarak was critical of Hezbollah in Lebanon and of Hamas in Gaza for provoking senseless killing, and he played a significant role in achieving postwar ceasefire arrangements. “Not everything Mubarak did was right,” President Shimon Peres declared Monday. “But he did one thing for which we all owe him a debt of gratitude. He kept the peace in the Middle East.”

Because Mubarak has served as a bulwark against regional chaos and was for decades a central pillar of American strategy against the radical forces led by Iran, Israelis found it baffling that President Obama turned his back on the embattled Egyptian leader so quickly. Pundits argued that Obama’s stance sent a deeply disconcerting message to America’s moderate allies across the region, from Saudi Arabia to Morocco, that they, too, might be as peremptorily abandoned in time of need. That message, the pundits said, might drive those equally autocratic leaders elsewhere for support, even possibly toward America’s regional foe, Iran. Secondly, the pundits insisted that by distancing himself from Mubarak, Obama was encouraging the would-be revolutionary opposition in Egypt in a gamble that could prove counterproductive to American and Western interests. Clearly, the American president was hoping for democracy in Egypt and a concomitant increase in popular support for America across the region.

In his Cairo speech in June 2009, Obama offered the Muslim peoples of the Middle East a new beginning. Now, he seems to be using the Egyptian crisis to underscore that appeal to the Muslim masses. But Israeli pundits warn that this is most unlikely to work. They maintain that instead of democracy in Egypt, there could well be a two-stage revolutionary process—an initial quasi-democracy, overtaken within months by the emergence of an autocratic Islamic republic under the heel of the Muslim Brotherhood. It would be similar to what happened when the United States supported pro-democracy forces against the Shah in Iran in the 1970s, only to see the emergence of the fundamentalist Ayatollahs. Moreover, in the event of an eventual Muslim Brotherhood victory, the big regional winner would be fundamentalist Iran.

Israeli diplomats across the globe have been instructed to quietly make the case for the importance of stability in Egypt. Careful not to exacerbate an already delicate situation by saying anything that might be construed as support for one side or the other, Prime Minister Benjamin Netanyahu has merely reaffirmed Israel’s desire to preserve regional stability. But it is safe to assume that his government would be relieved to see power remaining in the hands of Egypt’s current ruling elite — say, through a peaceful handover to Mubarak’s recently appointed vice president, Omar Suleiman.

The Israeli hope is that Suleiman, the former head of Egypt’s intelligence services and a major player in everything related to Egyptian-Israeli ties, would be able to continue Egypt’s pro-Western alignment and its support for the peace deal with Israel, while allowing a greater degree of democracy in Egypt and pre-empting the rise of an Islamic republic. But it is unclear how much popular support he can muster, given his close ties down the years with Mubarak, who seemingly overnight has become the most hated man in Egypt.

However the events in Egypt play out, they will clearly have an impact on the Israeli-Palestinian peace process. The very notion of a threat to the peace with Egypt will almost certainly further reduce the Netanyahu government’s readiness to take risks for peace. In a news conference with German Chancellor Angela Merkel in Jerusalem on Monday, Netanyahu re-emphasized the importance he attaches to the security element in any peace package—“in case the peace unravels.” As for the Palestinians, the Egyptian protests could trigger Palestinian demonstrations pressing for statehood—without peace or mutual concessions.

As usual, events seem to be reinforcing both sides of the Israeli political divide in their core beliefs. The right is already saying that Israel should not make peace unless it can be assured of ironclad security arrangements, and the left maintains that if only Israel had already made peace with the Palestinians and the Arab world, then popular unrest such as the protests in Egypt would not be potentially so earth-shattering.

Either way, the events in Egypt are not good news for those advocating Israeli-Arab peacemaking. They could push efforts to resolve the conflict back several decades.

Obama urges Mubarak not to run again

President Obama reportedly urged Egyptian President Hosni Mubarak not to run for office again.

The New York Times, the Al Arabiya news network and other media quoted U.S. officials on Tuesday as saying that Obama relayed the message through Frank Wisner, a former U.S. diplomat.

Egyptian presidential elections are slated for September.

The Obama administration has been struggling for days to address the intensifying protests in Egypt calling for an end to Mubarak’s 30-year autocracy.

For decades the United States has backed Egypt as a reliable ally in its anti-terrorism activities and in maintaining its peace with Israel.

Dilemma of pro-Israel groups: To talk Egypt or not?

As Egypt convulses, pro-Israel groups and U.S. Congress members are seized by the ancient maternal dilemma: If you have nothing nice to say, should you say anything at all?

The question of whether to stake a claim in the protests against 30 years of President Hosni Mubarak’s autocracy is a key one for the pro-Israel lobby and pro-Israel lawmakers because of the role they have played in making Egypt one of the greatest beneficiaries of U.S. aid.

And in the same way that the outcome in Egypt continues to idle in the gear of “anyone’s guess,” there is little consensus in the byways of pro-Israel Washington over how to treat the nation and its nascent revolution.

The competing claims were evident in the divergent, and at times contrasting, calls issuing from figures known for their closeness to the American Israel Public Affairs Committee, or AIPAC, the trendsetter in the pro-Israel community. In general, reactions to the unrest in Egypt crossed political lines, with some liberal and conservative commentators pressing the Obama administration to help topple the regime, and others stressing the need for stability.

Some AIPAC-related called for assistance to Egypt to be contingent on whether the emerging government remained committed to cooperation with Israel. Others were emphatic in omitting Israel as a consideration, saying it was not the place of Israel or its friends to intervene in what appears to be an organic shucking-off of a dictator.

Josh Block, AIPAC’s former spokesman who is still close to the lobby, said the commitment of whatever government emerges to peace with Israel should be a critical element in considering whether to continue the $1.5 billion Egypt receives in aid, much of it in defense assistance.

“Given what’s taking place, it’s appropriate for the U.S. government to be reviewing U.S. aid to Egypt,” said Block, now a senior fellow at the centrist Progressive Policy Institute and principal at the consulting firm Davis-Block. “No matter what happens, clearly one of the top criteria Congress is likely to use is Egypt’s approach to its peace treaty obligations with Israel.”

That seemed to be the tack adopted by U.S. Rep. Nita Lowey (D-N.Y.), the ranking Democrat on the foreign operations subcommittee of the U.S. House of Representatives Appropriations Committee. She framed her statement in the context of the 1979 Camp David peace accords with Israel, which is the basis for Egypt’s status as one of the top recipients of U.S. aid.

“Ever since the historic Camp David peace accords more than 30 years ago, Egypt and the United States have been partners in seeking a just resolution to the Israeli-Palestinian conflict,” she said. “It is in the interest of the United States and regional stability that this period of turmoil and uncertainty be resolved peacefully and that Egypt remain a strong ally.”

U.S. Rep. Ileana Ros-Lehtinen (R-Fla.), the chairwoman of the House Foreign Affairs Committee, took that posture further, saying in a statement that U.S. assistance should be contingent on an election that allows only parties that recognize Egypt’s “peace agreement with the Jewish State of Israel.”

Such cautions are fueled by fears of the role the Islamist Muslim Brotherhood might play in a new Egypt. Other pro-Israel lawmakers notably omitted reference to the peace with Israel in their statements.

U.S. Rep. Gary Ackerman (D-N.Y.), the ranking Democrat on the House Middle East subcommittee, called for a suspension of assistance to Egypt until Mubarak left—and then its renewal once a transitional government was in place, whatever its makeup.

“I believe the United States must suspend its assistance to Egypt until this transition is under way,” said the statement from Ackerman, who is Jewish and a pro-Israel stalwart.

In an interview, Ackerman said the omission of an Israel reference was deliberate.

“I understand the angst and anxiety that exists in Israel, but we’re not going to pick the next leader of Egypt,” he said.

Instead, Ackerman said, the United States should use what he said was a closing window of opportunity, and side pronouncedly with the people and against Mubarak.

“If we sign the people of Egypt up as lobbyists, they will do the right thing,” he said.

U.S. Rep. Howard Berman (D-Calif.), who is also Jewish and the ranking member on the Foreign Affairs committee and the author of last year’s sweeping Iran sanctions law, also kept Israel out of his statement. Unlike Ackerman, however, he said assistance should continue as a means of stabilizing the Egyptian military.

“So long as the Egyptian military plays a constructive role in bringing about a democratic transition, the United States should also remain committed to our ongoing assistance programs for Egypt, both military and civilian,” he said.

Betting on the military was perhaps the only certainty in the current chaos, said David Schenker, an Egypt expert at the pro-Israel Washington Institute for Near East Policy think tank The Egyptian army is popular among Egyptians and, unlike the hated police, has taken steps during the uprising not to alienate the street.

“The arbitrator of this may be the military,” Schenker said. “It doesn’t want to cede power to a civilian power that’s Islamist. The army has entrenched interests with this regime and likes very much its relations with the U.S. military.”

Egypt’s potential collapse triggered an intense “who’s to blame” debate in Washington over which party or group had done more to prop up Mubarak’s regime. One emerging theme was that more should have been done to use aid as leverage to nudge Mubarak toward democratization.

Pro-Israel congressional insiders said there had always been talk throughout the years of shifting funds from defense aid to democratization assistance, at times from unlikely bedfellows: Ros-Lehtinen and the Zionist Organization of America had backed such a shift, but so had the former Appropriations chairman, Rep. David Obey (D-Wis.), a frequent Israel critic.

Such initiatives were abandoned, the insiders said, both in Congress and in the Bush White House after Hamas won elections in the Gaza Strip.

In a hearing on Egypt assistance in May 2006, just after the Hamas victory, Rep. Shelley Berkley (D-Nev.), the lawmaker who is perhaps closest to Israel, made this aside: “I am wondering if I need a change in the way I think about the Middle East and about democratizing nations that are no more ready for democracy than the man on the moon.”

The remark made headlines in Egypt.

Now some pro-Israel voices are saying that not pushing for democracy has disastrous consequences—including critics of the regime. For example, the ZOA, which has frequently accused the Egyptian government of undermining peace and pressed for a reduction in U.S. military aid, now is calling for the Obama administration to do everything it can to keep the regime in place, with Mubarak or one of his associates in charge.

Obama “should be showing some loyalty to a regime with which we have had good relations for 30 years,” ZOA President Mort Klein said. “If we have elections in the near future, you’re going to have a result like in Gaza. Of course I want democracy, but I don’t want democracy when the results support Islamic takeover.”

Malcolm Hoenlein, the executive vice-president of the Conference of Presidents of Major American Jewish Organizations, told the Yeshiva World News that the United States should have been working more proactively to ensure an orderly transition to democracy.

“This is something that we knew was coming—we should have been working at it all along,” Hoenlein said, adding that the Bush administration had paid lip service to the notion of building democratic institutions and the Obama administration not even that.

Hoenlein warned against the emergence in Egypt of possible transition leader Mohammed ElBaradei, saying he covered up Iran’s true nuclear weaponization capacities while he directed the International Atomic Energy Agency, the U.N. nuclear watchdog.

“He is a stooge of Iran, and I don’t use the term lightly,” Hoenlein said. “He fronted for them, he distorted the reports.”

ElBaradei, who directed the IAEA from 1997 to 2009, returned to Egypt following his third term. Soon he was touted as a possible challenger to Mubarak’s autocractic reign and has emerged during the protests as a consensus figure.

During his term as IAEA chief, ElBaradei said Iran was further away from a nuclear weapon than many in the West claimed and castigated Western powers, including Israel, for suggesting that a military option against Iran was increasingly possible. He made it clear in those statements that his posture stemmed from the U.S. failure to heed warnings from him and other weapons experts that Iraq did not have a nuclear weapons capacity.

ElBaradei also has been cool to Israel, however, and has infuriated Israel’s military establishment by saying that Israel’s alleged nuclear arsenal undercuts efforts to keep Iran and other countries from going nuclear.

In an interview with The Washington Post just before he retired, he said Iranian President Mahmoud Ahmadinejad did not want to get rid of Israel, but to replace it with a non-Jewish state—two concepts Israelis and pro-Israel groups see as synonymous.

Hoenlein was not alone. Reporters were bombarded this week by e-mail from pro-Israel groups with ElBaradei quotes that appeared hostile to the United States. In some cases, however, the quotes were taken out of context and questionably sourced.

Keith Weissman, a former AIPAC lobbyist and analyst who witnessed the Iranian Revolution unfold and who has lived in Egypt, said the warnings about ElBaradei were overheated.

“From what I see in Cairo there is no evidence he is on an Iranian agenda,” he said

Weissman said tThe inclusion of the Muslim Brotherhood in the opposition alliance ElBaradei is leading should not be a cause for concern.

“In a post-Mubarak Egypt, you’d want the Brothehood close,” he said.

In any case, meddling is counterproductive, said Lara Friedman, the legislative director for Americans for Peace Now, writing in an op-ed for JTA.

“Denying the reality of change in Egypt does not help Israel; it only guarantees that Israel’s future relationship with Egypt will be more difficult,” she said.

U.S.: Egypt of ‘deep concern’ [UPDATE]

[UPDATE: 11:15 AM] Events in Egypt are of “deep concern,” the Obama administration said, and its government should show restraint.

“Events unfolding in Egypt are of deep concern,” P.J. Crowley, the state department spokesman, said Friday through the Twitter social network. “Fundamental rights must be respected, violence avoided and open communications allowed.”

Video posted on the Internet has depicted indiscriminate Egyptian police violence against protesters, and authorities have shut down much Internet access.

Late Friday, Egypt called its military in to quell riots—a rare occurrence in a country with a vast police force. Reports said two people were killed Friday.

In a statement she read live on Friday, Hillary Rodham Clinton, the U.S. secretary of state, urged Egypt’s government to “engage immediately” with its people on political, economic and social reforms, and called on it to restrain its security forces.

“We support the universal human rights of the Egyptian people, including the right to freedom of speech, of association, and of assembly,” she said. “We urge the Egyptian authorities to allow peaceful protests and to reverse the unprecedented steps it has taken to cut off communications.”

Politico reported that the Obama administration called for a rare Saturday meeting of its “principles,” high-ranking officials of the relevant agencies, to discuss Egypt.

It was the fourth day of clashes in Egypt, and riots have erupted in Jordan and Yemen as well. There have been protests in Lebanon and the Palestinian areas, and Syria has reportedly limited Internet access.

The clashes erupted after similar protests led to the downfall of the Tunisian dictatorship.