The Egyptian-brokered deal to free Sgt. Gilad Shalit, the Israeli who has been held by Gaza-based militants for more than five years, marked a step by the military-led government in Cairo toward restoring the country’s coveted role as a regional diplomatic play maker.
Egypt’s General Intelligence Directorate, which is led by a veteran of the ousted Mubarak regime, helped finalize the deal in which Israel agreed to release more than 1,000 Palestinian prisoners and Hamas said it would free the Israeli soldier.
No prisoners have been exchanged yet, and the deal could still collapse. Israeli Prime Minister Benjamin Netanyahu expressed hope that Egypt would transfer Sgt. Shalit from Gaza to Israel in the coming days.
But after a number of failed attempts by Israel to secure the soldier’s release, Egypt’s beleaguered military leadership showed it can play the role of regional broker despite populist pressure that it take a stronger stance against Israel.
The deal shows Egypt’s interim government straddling a new embrace of Hamas—a foe of former President Hosni Mubarak—while maintaining a relationship with Israel that was cultivated before the revolution that toppled the Mubarak regime in February.
Before the announcement of Tuesday’s agreement, Egypt’s revolution appeared to have poisoned the fragile diplomatic triangulation between Israel, Egypt and the Palestinians.
Israel had misgivings about the revolution, fearing that the fall of Mr. Mubarak would jeopardize the peace treaty he had championed. Then in May, Egypt’s military helped broker a reconciliation between rival Palestinian factions Hamas and Fatah, to Israel’s dismay.
Tensions escalated in August, when Egypt’s government accused Israeli border guards of killing six Egyptian security personnel during a crossborder shootout with militants who attacked Israeli vehicles. Later that month, a mob of Egyptians breached the heavily guarded Israeli Embassy in Cairo and forced Israel to withdraw its ambassador and dozens of staff.
The prisoner-swap deal, however, allowed Egypt’s military regime to prove its diplomatic clout in an arena that often stymied Mr. Mubarak, who made the Mideast peace process a priority in his nearly 30-year rule.
The deal, however, relied on some continuity with the Mubarak regime. Intelligence chief Murad Muwafi, a former top intelligence officer who inherited the spy chief position after the revolution, was a driving force behind the deal, as well as the effort in May to reconcile Hamas with the Palestinian Authority. Egypt’s intelligence apparatus managed its own ties with the Gaza-based militants.
Israel publicly thanked Egypt for its role in the mediation effort, a sign it is keen to boost Cairo’s status now that Israel’s alliance with Turkey, another aspiring regional broker, has turned into a contentious rivalry.
Egypt’s minister of foreign affairs, in turn, said Wednesday that the Israeli defense ministry had issued a long-sought official apology for the border killings.
The Shalit deal wouldn’t have been possible before Egypt’s revolution, analysts said, because of Hamas’s ideological connections to the Muslim Brotherhood, which led opposition to Mr. Mubarak.
“I doubt whether it could have happened if Mubarak was still in power because there was so much mistrust between Egypt and Hamas. Something had to come up to break the deadlock, and this was the change in Egypt,” said Eli Shaked, a former Israeli ambassador to Egypt.
The uprising against Syrian President Bashar al-Assad also played a role, upsetting Hamas’s cozy relationship with Syria and pushing the Palestinian group to look for a new regional partner.
Hamas’s government-in-exile conducts business from Damascus, but is moving its offices and is seeking to relocate to Cairo—a move that would have been unthinkable under Mr. Mubarak’s rule—said Gershon Baskin, the founder of the Israel Palestine Center for Research and Information. Mr. Baskin has served as a negotiator and passed messages between Israel and Hamas and the Palestinian Authority.
A Hamas spokesman denied the group was planning to leave the Syrian capital.
The deal also wouldn’t have been possible without the overlapping interests of Israel and Hamas to undermine Palestinian Authority leader Mahmoud Abbas, who both opposed his appeal to the United Nations for statehood recognition, Palestinian analysts said.
The deal, however, is expected to boost Hamas’s platform of armed uprising against Israel, as opposed to Mr. Abbas’s diplomatic strategy.
“The role of Egypt is important, but there was a limit. It wouldn’t have been successful if it hadn’t been in the interest of both the parties to make the deal,” said Mohamed Dejani, a political science professor at Al Quds University in the West Bank.
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