For three decades ousted Egyptian president Hosni Mubarak resisted calls to normalise relations with Iran, which were severed after the 1979 Islamic revolution that toppled pro-US Shah Mohammad Reza Pahlavi.

Mubarak did little to disguise his contempt of the Islamic regime in Iran, one he viewed as a destabilising force in the Middle East and the Gulf regions and a threat to Egypt's national security and interests.

Although the two countries reopened small diplomatic missions in 1991 on the level of a chargé d’affaires and approved plans to upgrade economic and trade ties, Mubarak remained loath to take real action to restore full diplomatic and political ties.

At an Arab summit in Libya last year, Mubarak rebuffed the Arab League's secretary-general, former Egyptian foreign minister Amr Moussa, for suggesting closer ties with Iran and engaging the Persian nation in a forum for regional cooperation and conflict resolution.

Mubarak's snub to Iran was interpreted as appeasement of, or even submission to, the United States, Israel and the Gulf countries who pursue a policy of containment and isolation of Iran. Since his ouster, the interim government has shown some signs that it is charting a new course in Egypt's foreign policy, including normalising relations with Iran.

Foreign Minister Nabil El-Arabi had said that Egypt and Iran will resume normal relations. In recent weeks contacts between the two nations have moved to the point that a 50-member Egyptian "people's diplomacy" delegation travelled to Tehran in an effort to push for the restoration of Egyptian-Iranian ties.

In February Egypt allowed the transit of two Iranian frigates through the Suez Canal into the Mediterranean Sea. This was the first time that Iranian naval ships had passed through the strategic waterway since the Islamic revolution in 1979 and was seen as a sign of thawing relations between the two nations.

For Iran, it said that it is interested in improving relations with Egypt's new rulers hoping that changes in Egypt will lead to the emergence of a more Islamic Middle East that will stand up to its enemies, Israel and the United States.

Following Egypt's revolution, Iran praised the Egyptian protests, saying they echo events there in 1979. Iran's supreme leader, Ayatollah Ali Khamenei, had called the uprising in Egypt and Tunisia the result of the people's "Islamic awakening." The revolutionary change in Egypt, including in public attitude toward the country's regional standing which had diminished under Mubarak, is reflected in the transformation of the country's external relations into a more independent and assertive foreign policy.

Yet efforts to expand relations with Iran will present unprecedented challenges to Egypt's newly found foreign policy and diplomacy to any post-Mubarak administration. Egypt has to formalise a constructive and consistent foreign policy, especially on regional issues that would give it a wider room for manoeuvring and promote its national security interests and major foreign policy and economic objectives.

With regard to relations with Iran, one fundamental issue of conflict is Egypt's 1978 peace treaty with Israel which the leaders of the Islamic republic have always scoffed at as submission to the West and the Jewish state.

The treaty is the corner stone of Egypt's national security strategy and foreign policy, and it is highly unlikely that a new government will discard it and risk a war with Israel or create a political vacuum in the Middle East that players such as Iran would aim to fill.

Given its leading regional status as the Arab world's most populous nation, Egypt is also not expected to jeopardise its relations with pro–US Saudi Arabia and other Gulf countries whose political support and economic assistance is badly needed during a difficult transitional period.

Riyadh, whose first concern is blocking the expansion of Iran's influence, will not welcome Cairo restoring ties with Tehran. Saudi Arabia has enormous political, economic, social and religious instruments to promote its interests and keep Egypt in check. Riyadh's recent pledge of four billion dollars in aid to Egypt in the form of long term loans and grants is just one example of how the oil-rich kingdom can tacitly flex its financial muscle.

Its huge media machinery which controls a large chunk of the Middle East satellite and print news business and its social and religious networks in Egypt are other tools which allows it to play a spoiler role in Egypt.    

The biggest barrier to fully fledged relations with Iran, however, is domestic. The Egyptian public is split virtually down the middle on this issue between those who consider Iran as a threat and fear that it will try to spread the Shia brand of Islam in Sunni-dominated Egypt, and others who say the move will serve the country's national interests and revitalise Egypt's key role in regional politics.

Egypt's approach to Iran, therefore, should be balanced and well calculated. Egypt can restore full diplomatic ties now but full normalisation of relations should wait until an elected government is in place. A democratic Egypt is essential to its full recovery from decades of weakness and vulnerability and to its re-emergence as a respected and self-confident regional power. That will remove any threat and gives Egypt a powerful bargaining chip.

An Egyptian-Iranian rapprochement can better be achieved through a broader approach and within the framework of well-defined understandings, or even a deal, on bilateral and regional issues of mutual interests.

While the thaw in relations should have no detrimental effects on Cairo's ties with its traditional international allies or its good relations with Arab countries, it must reassure them that their worst fear of Iran using its newly established ties with Egypt to increase its influence- will not materialise.

Moreover, Egypt should also emphasise the importance of preventing any kind of interference in internal affairs and respect of religious, sectarian and cultural aspects of each country. The deal should bluntly state that Iran must refrain from exporting its brand of revolutionary Islam and respect the genuine democratic aspirations of the Egyptians, as well as their culture and religious beliefs.