Due to the fall of the Mubarak regime, government authority has collapsed in the Sinai Peninsula, leaving a vacuum that is rapidly being filled by Islamist militant groups. This has created a security risk for Egypt and Israel, as well as for the international community due to the strategic importance of the Suez Canal zone and threatens the durability of Israeli-Egyptian relations.

Last week, Israeli defense minister Ehud Barak called on Egypt to take control of the increasing lawlessness in the Sinai as a condition for maintaining the peace treaty with Israel.

Since February 2011 when Egyptian president Hosni Mubarak was ousted from power, border security incidents have increased. These incidents range from cross-border infiltration of militants into Israel, where they launch attacks against Israeli civilians, smuggling and an increase in rocket attacks into southern Israel emanating from the Sinai.

The heightened lawlessness that has occurred along the Egyptian-Israeli border has taken place despite steps taken by the interim Egyptian government to deploy thousands of troops to the Sinai region to curb militant activity.

Analysis

Israel remains caught between a rock and a hard place, balancing the need to defend its citizens in the south, while trying to avoid the collapse of the peace agreement with Egypt.

Despite three decades of relative quiet along the Egypt-Israeli border, an increase in tensions since the fall of the Mubarak government last year has prompted the Israeli government to construct a new barrier along the 266 kilometer border, that when finished will cover the area from Gaza to Eilat. In addition to the fence, the Israeli Defense Forces are taking additional steps to monitor the border and bar infiltrators.

Egypt, too, has paid an economic price for the increase in militant activity in the Sinai Peninsula, ranging from fourteen terrorist attacks targeting the natural gas pipeline that supplied both Israel and Jordan as well as a significant loss in tourism in the Red Sea resort area due to the increase in violence. Both are a significant source of income for the country. The tourism industry employs around one in eight Egyptians.

Egyptian security officers who have attempted in the past year to reestablish security in the Sinai have been attacked by the militants, with the result being that areas in the Sinai are now completely out of the government’s control. These changes to the security situation in the peninsula have prompted Israeli officials to suggest that at the moment, “Egypt is more dangerous to Israel than Iran.”

Though for the moment, the militants appear to be focused on maintaining a hold on life in the Sinai area, as time passes there is a risk that these groups may begin to align more closely with the global jihadi movement now led by Egyptian-born Ayman al-Zawahiri.

Despite the growing lawlessness in the region, both Egypt and Israel have been treading carefully to avoid escalating tensions further, especially while the political situation in Egypt remains volatile.

Israeli policymakers however are growing frustrated, as the Islamist militants continue to increase their hold over the Sinai. Israel has stated it has no intention of entering Egyptian territory but government officials have acknowledged the need to sit on their hands and wait for a new government to emerge in Cairo to rein in the militant activity in the Sinai.

However, the inability of the interim government to curb the growing militant activity in the Sinai is another indication to Israel that the new Islamist controlled Egyptian government has no intention of maintaining the peace treaty with Israel.

Wikistrat Bottom Lines

Opportunities

• A major attack on Israel (perhaps using large numbers of indirect fire weapons) that originated in the Sinai, for which an Al Qaeda affiliate could claim some level of responsibility, would greatly increase Al Qaeda’s declining credibility by showing that it could achieve its longstanding stated goal of directly attacking Israel’s homeland.
• Right-wing elements in Israel could use this issue as an argument for reoccupation of the Sinai, though the situation would have to deteriorate substantially before such an option is politically palatable.
• Hamas is already seeking ties with Islamist groups in Egypt and could use this situation for military and political gain. Groups such as Hezbollah and Hamas will be able to use overhyped fears of an Israeli military incursion as a means of inciting their support base.

Risks

• Although using or allowing proxies to attack Israel from the Sinai might be ideologically appealing to Islamist groups within the new Egyptian government, the risk of an Israeli military move into the Sinai is not balanced from an Egyptian strategic perspective by any realistic hope of a long-term strategic gain for Egypt. The need to deter an Israeli incursion (assuming this were possible) could put more pressure on the Egyptian military, which already has to be concerned with internal security in light of the past year’s events.
• There is a risk of renewed civil strife in Egypt between the military and Islamist elements over this issue. The military in particular has to date been at pains to avoid incurring unpopularity by spilling too much blood over political differences, despite using measured violence against protesters.
• A military move by Israel into the Sinai to quell militant activity there in the absence of an effective Egyptian presence would put strain on the Israeli military’s resources and potentially provoke challenges elsewhere.
• Any overt miltary behavior by Israel further strains the Egyptian-Israeli relationship and risks raising more anti-Israel sentiment in the Egyptian public.

Dependencies

• The Egyptian military’s response to the situation over the medium term will be a key factor in determining to what extent the situation leads to civil strife within Egypt.
• An increase in militant activity, or a larger scale attack using large numbers of indirect fire weapons on Israeli personnel or civilians, would undoubtedly escalate the situation and perhaps provoke an Israeli military incursion.
• Particularly given heightened tensions with Iran, any reports that militants in the Sinai were importing UAVs or cropdusters capable of distributing chemical weapons would likely provoke an Israeli military response.
• How the Egyptian government maintains control in the Sinai and its relationship with Israel are key to the upcoming elections.

Steven Aiello, Lauren Mellinger and Martin Skold contributed to this analysis.