Quarterly Updates for (16 Feb 2018 — 15 May 2018)

Besides ongoing talks by the General Intelligence Directorate with Hamas on the stalled Palestinian reconciliation process and the Great March of Return (see “Intra-Palestinian Dynamics” and “Great March of Return” above), this quarter the Egyptian government lent its voice to the chorus of international condemnation on Israel’s use of deadly force in Gaza and the opening of the U.S. embassy in Jerusalem. That aside, there was only one significant Egypt-related development in the Palestinian-Israeli arena.

On 2/19, the consortium of companies leading extraction work at the Leviathan and Tamar natural gas fields off Israel’s coast—the U.S.-based Noble Energy and Israel’s Delek Group—announced a $15 billion export agreement with Egypt’s Dolphinus Holdings. Under the agreement, Egypt would import 64 billion cubic meters of Israeli natural gas over ten years. Israeli prime minister Netanyahu lauded the agreement, saying it would “strengthen our economy” and “regional ties.” Israel’s Energy Minister Yuval Steinitz called it Israel’s most significant export deal with Egypt since the two countries’ 1979 peace treaty.

The Egyptian response to the 2/19 deal appeared conflicted. On 2/26, Haaretz reported that Egyptian officials had “signaled” that implementation was contingent on Israel abdicating its claim to a $1.8 billion Egyptian debt (on 4/28/2017, an international court in Geneva ordered Cairo to pay the sum to the IEC in compensation for suspending natural gas exports in 2012). This appeared to come as a surprise to the Israelis. “Israel hasn’t given up on the debt and the matter did not come up for discussion during talks on the Leviathan export deal to Egypt that was signed [last] week, Israel’s Ministry of Energy stated (2/26). “There won’t be any backing down on the debt,” the IEC added. “The company continues to seek to collect it.” By the end of the quarter, it was unclear whether the deal would go forward or some new compromise would be reached.