Tensions flare as Egypt cuts off gas deal with Israel

Netanyahu tries to play down fraying relations as Cairo scraps Mubarak-era contract

Jerusalem

Israeli officials have sought to downplay the political repercussions of Egypt's abrupt decision to cancel a 20-year gas-supply contract over a payment dispute amid deteriorating ties between the two countries.

The gas deal, signed in 2005, has emerged as a focus for public ire in Egypt. Once seen as a vehicle for corruption under Hosni Mubarak, the ousted Egyptian leader, it is now viewed as a hated symbol of the previous regime's close ties with the Jewish state.

Israeli officials initially reacted angrily to the Egyptian decision, calling it a "dangerous precedent" that could endanger the 1979 peace treaty between the two countries. But yesterday, Israel back-pedalled on its criticism of Cairo, painting the dispute as purely commercial in nature.

"We don't see this cut-off of the gas as something that is born out of political developments," the Israeli Prime Minister, Benjamin Netanyahu, said. "It's actually a business dispute between the Israeli company and the Egyptian company."

Mohamed Shoeib, head of the state-owned Egyptian Natural Gas Holding Company, said the deal was cancelled because Israel had not paid for the gas for the past four months. "This has nothing to do with anything outside of the commercial relations," he said.

Israel has rejoined that the gas supply, which at one time accounted for 40 per cent of its needs, has been continuously disrupted in recent months. Unknown saboteurs have blown up the pipeline in the Egyptian Sinai more than 14 times in the past year.

The gas deal, controversial even under Mr Mubarak's rule, has come under intense scrutiny in Egypt since the dictator was toppled from power last year following a popular uprising. His regime, which fostered close ties with Israel despite deep-running resentment among ordinary Egyptians over Israeli policies towards the Palestinians in Gaza and the West Bank, was accused of selling the gas to Israel at below-market prices. Moreover, Mubarak allies were accused of using the deal to enrich themselves, and several officials have faced charges in connection with the contract.

The decision to cancel the deal has been welcomed inside Egypt, with the presidential candidate Amr Moussa arguing that it was a "natural step" given the corruption that tainted the agreement. Others said that Egypt needed the gas amid shortages of its own, although an Egyptian minister said yesterday that Israel was welcome to negotiate a new contract.

As the Israeli premier dispatched officials to Cairo in an effort to contain the crisis, there were some in his government who warned that the Egyptian decision would have far-reaching repercussions. "The pretext is that this is a business dispute, but we see it as not a business dispute," said Uzi Landau, Israel's Energy Minister, warning of power shortages this summer and signalling worse to come. The Finance Minister Yuval Steinitz described it as a "dangerous precedent that diminishes the peace treaty".

Many in Israel fear that the Islamist parties, who now command a majority in Egypt's new parliament, will abrogate the landmark 1979 peace deal that has ensured a stable, if cool, peace along its southern border for three decades. Although the Muslim Brotherhood, the dominant political force in Egypt, has pledged to uphold past agreements with Israel, the peace deal, which was signed without consultation with the Egyptian public, is nevertheless expected to become a focus of debate in coming months.

"What happened with the gas deal serves as a reminder that any kind of relationship with Israel ... is not popular in Egypt," Eli Shaked, an Israeli former ambassador to Egypt, told The Independent. "It's not going to happen in the foreseeable future, but after all the procedures – governmental, presidential [elections] – come to an end, the Israeli file will again be on the table."

Special relationship: Post-spring freeze

* Militants crossed the border and attacked an Israeli bus, killing eight, last August. Five Egyptian soldiers were later killed, presumed to be by Israeli forces pursuing the militants.

* Thousands of rioters stormed Israel's embassy in Cairo in September, forcing the ambassador to flee. Egypt's military rulers were accused of initially ignoring US pleas to intervene for political gain.

* Attackers have blown up the Israel-Egypt gas pipeline more than 14 times since the revolution in Egypt, apparently to stop supplies to Israel. The attacks have further strained relations between Israel and Egypt since the exit of Hosni Mubarak.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Kara Tointon and Jeremy Piven star in Mr Selfridge
tvActress Kara Tointon on what to expect from Series 3
Voices
Winston Churchill, then prime minister, outside No 10 in June 1943
voicesA C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
News
i100
Sport
footballBrighton vs Arsenal match report
Arts and Entertainment
Benedict Cumberbatch has spoken about the lack of opportunities for black British actors in the UK
film
News
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Austen Lloyd: Private Client Solicitor - Oxford

Excellent Salary : Austen Lloyd: OXFORD - REGIONAL FIRM - An excellent opportu...

Austen Lloyd: Clinical Negligence Associate / Partner - Bristol

Super Package: Austen Lloyd: BRISTOL - SENIOR CLINICAL NEGLIGENCE - An outstan...

Recruitment Genius: Sales Consultant - Solar Energy - OTE £50,000

£15000 - £50000 per annum: Recruitment Genius: Fantastic opportunities are ava...

Recruitment Genius: Compute Engineer

Negotiable: Recruitment Genius: A Compute Engineer is required to join a globa...

Day In a Page

Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project
Diana Krall: The jazz singer on being friends with Elton John, outer space and skiing in Dubai

Diana Krall interview

The jazz singer on being friends with Elton John, outer space and skiing in Dubai
Pinstriped for action: A glimpse of what the very rich man will be wearing this winter

Pinstriped for action

A glimpse of what the very rich man will be wearing this winter
Russell T Davies & Ben Cook: 'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'

Russell T Davies & Ben Cook: How we met

'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Bill Granger recipes: Our chef serves up his favourite Japanese dishes

Bill Granger's Japanese recipes

Stock up on mirin, soy and miso and you have the makings of everyday Japanese cuisine