In a sudden twist of events over the last week, political relations between Israel and Egypt became increasing strained, climaxing in Egypt's decision Sunday to unilaterally cut the natural gas deal with the self-proclaimed Jewish state.

Despite both sides claiming this was just a business deal gone sour, against the backdrop of growing discontent and following the exchange of heated statements, it has become apparent that the actions of the neighbouring states are political.

Even though Egyptian officials had previously rejected calls to terminate the unpopular fuel deal arguing it was crucial for peace with Israel, on Sunday Egypt's General Petroleum Corporation[EGPC] and Natural Gas Holding Company[EGAS] ditched the deal with East Mediterranean Gas Company (EMG). Israel is a major shareholder in EMG.

Citing purely economic reasons, head of Egypt's Petroleum Authority Hany Dahy stated the decision was taken after several late Israeli payments. Following muchlegal consultation, Dahy explained that their findings showed that the contract stipulated that any one of the parties can terminate its obligations, if the other was not fully compliant with the terms.

The termination of the Israeli gas deal and the ensuing statements clarifying the decision, also directly contradict a long defended stance the Egyptian government has taken, in favour of the contract.

In 2010, the Supreme Administrative Court overruled a 2008 Administrative Court ruling in favour of cutting the gas deal, based on the argument that the court does not have the authority to infringe upon the government's sovereignty.

Thus contrary to Dahy's explanation that the move was purely economical, the decision to continue or cut the deal was previously considered by officials to be a political matter linked to national security.

Meanwhile, Shaul Mofaz, the Israeli Knesset opposition leader, described Egypt's decision as a possible breach of the 1979 Camp David Accords andIsraeli Foreign Minister Avigdor Lieberman went as far as to suggest bolstering Israel's military presence along the Sinai border.

Such Israeli claims were however quickly brushed off by Egyptian political analysts.

Abdel-Alim Mohamed, former member of the Al-Ahram Centre for Political and Strategic Studies, confirmed that the gas deal was not linked to the peace accord. He added that cutting the gas deal could not have been a purely economic act and clearly had politically motives.

The gas deal has notbeen theonly tension between the two countries this week.

Only two days earlier, on 21 April, an Egyptian official claimed Israel was trying to harm tourism in Sinai. His statements came after Israel's anti-terrorism unit on Saturday urged its citizens holidaying in Egypt's Sinai Peninsula to leave immediately, citing fears of kidnap attempts and terrorism.

South Sinai Governor Khaled Fouda refuted Israel's claims accusing them of spreading rumors. Fouda said that Israel often did this whenever Egypt's tourism industry witnessed a revitalisation.

The increase in the occupancy rate of Sharm El-Sheikh hotels to 65 per cent, according to Fouda, was the main trigger behind Israel's "irresponsible statement."

Ignoring the rising tension between the two sides, last week on 18 April, Egypt's Grand Mufti Sheikh Ali Gomaa paid a rare visit to Jerusalem. His trip came despite decades of opposition by various political and religious bodies in Egypt to normalising relations with Israel and to travelling to areas under Israeli control.

His move was interpreted by many as an act of reassurance for the self-proclaimed Jewish state and a step towards normalisation, although he refuted such claimsstressing he continued to refuse accepting relations between Muslims and the Israeli occupation.

He instead highlighted the importance of supporting Jerusalem, adding he saw visits to Jerusalem's Al-Asqa mosque, the world's third most important Islamic site, as an essential part of "re-awakening" the Palestinian cause for Muslims.

It is yet unclear what the last week's developments mean for Egypt-Israeli relations in the long term.

Official statements have yet to be made from the Egyptian side, although Foreign Minister Mohamed Amr requested that Egypt's ambassador in Israel obtain official clarifications regarding Lieberman's recent statements threatening Sinai's borders.



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