Netanyahu Says Radical Islamic Groups May Try to Exploit Egyptian `Chaos'

Israeli leaders are concerned that radical Islamic groups will take advantage of popular protests in Egypt and elsewhere in the Muslim world and try to seize government control.

“The sources of the instability, the central source, does not stem from radical Islam, not in Tunisia or Egypt,” Israeli Prime Minister Benjamin Netanyahu said yesterday in Jerusalem at a press conference with German Chancellor Angela Merkel. “But it is true that in a situation of chaos, an organized Islamist entity can take over a country. It’s happened in Iran and at other places as well.”

Israel has been watching protests in the Arab world this month starting with Tunisia, where leader Zine El Abidine Ben Ali fled on Jan. 14 following mass demonstrations. Yemen has also been the site of anti-government rallies.

Israel’s shekel tumbled to a more than four-month low against the dollar during trading yesterday as investors sought the relative safety of the dollar. The currency dropped as much as 1.4 percent to 3.7498 per dollar, the lowest level since Sept. 16, and traded 0.3 percent lower at 3.7080 per dollar as of 10:25 p.m. in Tel Aviv.

Egypt’s upheaval could have a “seismic” impact on the region and no country will feel it more acutely than Israel, analysts say.

Photographer: Menahem Kahana/AFP/Getty Images

Israel's Prime Minister Benjamin Netanyahu. Close

Israel's Prime Minister Benjamin Netanyahu.

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Photographer: Menahem Kahana/AFP/Getty Images

Israel's Prime Minister Benjamin Netanyahu.

‘Big Blow’

Egypt, the first Arab country to sign a peace agreement with Israel in 1979, has been cooperating with Israel to restrict arms smuggling into the Gaza Strip, which is controlled by the Hamas Islamic militant group. Egypt and Israel share a 130-mile border and they also share a concern over Iran’s nuclear ambitions.

“This is a big blow,” former Israeli trade minister Benjamin Ben-Eliezer told Israeli Army radio on Jan. 30. Ben- Eliezer, the Israeli politician closest to President Hosni Mubarak, spoke to the Egyptian leader over the weekend. Mubarak is “the only leader that I know who identifies himself, in a clear way, with the importance of the peace agreements with Israel,” the former minister said.

Mubarak on Jan. 29 named intelligence chief Omar Suleiman as vice president, the first time in his 30-year rule that he has named a deputy, and former air force commander Ahmed Shafik as prime minister.

Suleiman as Mubarak’s replacement “would be the positive scenario” for Israel, said Eli Shaked, the country’s ambassador to Cairo from 2003 to 2005.

‘Paving the Way’

He’s “committed to peace with Israel, the special ties with the U.S., and the heritage of Sadat-Mubarak,” Shaked said. A likely scenario was that he would be a transitional figure, “paving the way for the Muslim Brotherhood,” he said.

“We will be changing one dictator with another -- one who will be very anti-American, anti-West,” Shaked said.

Jonathan Alterman, director of the Middle East Center at the Center for International and Strategic Studies in Washington, said such a change in Egypt would mean “the way Israelis calculate their entire strategic position is going to change.”

It “could be a seismic change on the size of the Iranian Revolution of 1979” that brought conservative religious leaders to power, said David Makovsky, director of the Washington Institute for Near East’s Policy Project on the Middle East.

Israel established an embassy in Cairo, its first in any Arab country, in 1980, according to Israel’s Ministry of Foreign Affairs. About 50 normalization agreements have followed, largely economic and cultural, to enhance that peace, according to the Israeli ministry.

Contain Hamas

Mubarak’s hostility to Iran was on full display in 2008 diplomatic cables released by WikiLeaks, in which he calls Iranians “big, fat liars” who “justify their lies because they believe it is for a higher purpose.”

Israel and Egypt have cooperated to contain Hamas, the militant group that controls the Gaza Strip and smuggles weapons into the territory through tunnels from Egypt. The U.S., EU and United Nations consider Hamas a terrorist group.

Israel and Egypt also have both been targeted by the Lebanon-based militant group Hezbollah. Egypt arrested 49 alleged Hezbollah militants in April for planning to obtain explosives, among other things. And Egypt has come under attack from al-Qaeda, a branch of which attacked the resort town of Sharm El Sheikh in 2005.

“They’ve seen the world more commonly than they’ve differed,” Makovsky said.

Gaza Strip

“Israel has to be concerned about how Mubarak’s downfall could affect the situation in the Gaza Strip,” said Yoram Meital, director of Ben Gurion University’s Herzog Center for Middle East Studies and Diplomacy in Beersheba. If the Egyptian army halts cooperation with Israel, it could allow more heavy weapons, such as anti-tank missiles, to be smuggled into Gaza, Meital said. “That would make a difference in any future military action that Israel may take in the future,” he said.

Makovsky said that even in the event of Mubarak’s ouster, continued stability is a likely outcome.

“The issue isn’t the individuals, the issue is the pillars of the regime,” Makovsky said, identifying those pillars as the military, the government bureaucracy and business community. “They’ve been there so long that those foundations are strong and that coalition will withstand countervailing winds.”

In that event, the Egypt-Israel peace treaty would probably hold, said Steven Cook, a senior fellow for Middle Eastern Studies at the Council on Foreign Relations. “It’s easier to defend something you inherit and did not create,” he said.

To contact the reporter on this story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net; Calev Ben-David at cbendavid@bloomberg.net; Nicole Gaouette in Washington at ngaouette@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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