Egypt on edge: Finding a delicate balance between Gaza and Trump
Over time, Egypt has received more US foreign aid than any other country besides Israel.
By May Darwich
US President Donald Trump famously called Egyptian president Abdel Fattah el-Sisi his “favourite dictator” in 2019, but their relationship has been complex.
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Trump’s return to the White House for a second term has sent ripples of concern through Cairo. In January 2025, Trump proposed a resolution to the ongoing Israel-Hamas war in Gaza: forcibly relocating Palestinians to Egypt and Jordan. Trump simultaneously threatened to withdraw US aid if these countries didn’t comply with the proposal. Sisi’s Egypt will need to navigate Trump’s ambition without sacrificing the regime’s own survival. May Darwich, who has studied Arab states’ foreign policies and alliances in the Middle East, explains what’s at stake.
How dependent is Egypt on the US?
Over time, Egypt has received more US foreign aid than any other country besides Israel. It has received US$78 billion in economic assistance and US$90 billion in military assistance since 1946.
A peace agreement with Israel in 1979 concluded the war between the two countries. Israeli forces withdrew from Egypt’s Sinai Peninsula. Since then, the US has provided Egypt with a fixed amount of US$1.5 billion, of which US$1.3 billion is military aid, every year. It goes to financing Egypt’s purchase of weapons systems from US defence contractors.
US aid has been a cornerstone of Egyptian-US relations for decades.
Since 1979, Egypt has been a central pillar of US policies in the Middle East. Military aid is deemed essential to ensure that the regime in Egypt aligns with US interests. At the same time, this aid is widely seen as contributing to the survival of Egypt’s authoritarian regime.
However, history shows that Egypt can soften the potential impact of the US freezing assistance during periods of strained relations.
The US suspended some military assistance to Egypt after the regime change in 2013. During that time, el-Sisi, who was elected president in 2014, received support from Saudi Arabia and the United Arab Emirates. He also increased weapon imports from France and Russia.
After a period of review, the Barack Obama administration released aid to Egypt to preserve US interests. As US Secretary of State John Kerry once explained:
We are getting a return on that investment that is not inconsequential. The army also is helping us enforce security in the Sinai (in Egypt). The army is also helping us enforce the Gaza peace.
Should this relationship come under strain again, Egypt could learn to become even more independent. China’s influence in Egypt is growing, and the Gulf states that enjoy a close relationship with Sisi may also decide to commit funding.
How has Egypt balanced its interests with Arab states, Israel and the US?
The signing of the Egyptian-Israeli peace treaty in 1979 marked a shift in Egyptian foreign policy. The treaty aligned Egypt with the west in recognising Israel. This decision, however, led to Egypt’s isolation in the Arab world and its expulsion from the Arab League (it was readmitted in 1989).
When Mohamed Hosni Mubarak assumed power following Anwar el-Sadat’s assassination in 1981, Egypt had to balance its partnership with the US, maintain peace with Israel and reconcile its relations with Arab states.
Egypt condemned Israeli aggression against Palestinians and against Lebanon in 1982 and 2006, and froze efforts to normalise relations with Israel. This reinforced its pivotal position in Arab circles without jeopardising its peace with Israel.
Meanwhile, Egypt helped US military assets to move across the region and oil to flow through the Suez Canal. It maintained peace and stability with Israel by pressuring Palestinian resistance movements into de-escalation. This balancing act allowed Egypt to become a mediator between Palestine and Israel.
Egypt under Sisi has made efforts to maintain the balancing act. However, the ongoing Gaza war has intensified Egypt’s challenges. These include refugee flights and instability at its border. The war has also threatened Egypt’s longstanding role in the Middle East region.
How has the Gaza war threatened Egypt’s balancing act?
The onset of the Gaza war in October 2023 put Egypt on edge. Cairo is apprehensive about Israel’s potential strategy of forcibly locating Palestinians in the Sinai Peninsula, which is on its territory. Egyptian officials have deemed that scenario as a red line. Cairo doesn’t want to be seen as undermining the Palestinian cause.
Also, Egyptians harbour concerns that the presence of a substantial Palestinian population in Sinai – which links Africa to Asia, and borders Israel and Gaza – could transform the region into a launchpad for attacks on Israel. This would compel Egypt to either suppress such activities or face retaliation from Israel.
This concern stems from a 1955 incident. The Israeli army raided an Egyptian military camp in the Gaza Strip, which was then under Egyptian control. Seventeen soldiers were killed following a Palestinian militant’s killing of an Israeli. A plan to move Palestinians to Sinai sparked protests in the Gaza Strip, bringing the Egyptian military into direct confrontation with Palestinians.
This historical event has continued to shape Egyptian foreign policy, which rejects any relocation of Palestinians in Sinai.
The current war has highlighted structural weaknesses in the already precarious Egyptian economy. The Houthi attacks in the Red Sea that began in 2024 caused a sharp drop in revenues from the Suez Canal, a critical source of foreign revenue for Egypt.
Sisi played on European fears that what happened in Gaza could harm Egypt’s economic situation and lead to mass migration to Europe. But cash infusions won’t solve the deep-seated economic challenges facing the country.
Cairo’s role as a mediator between the West, Israel and the Arab world is facing renewed challenges. Other mediators, like Qatar, have emerged.
What could affect Egypt’s response to Trump’s proposal to relocate Palestinians?
Trump’s proposal places the Egyptian regime in a precarious position. If Egypt agrees to the plan to relocate Palestinians from Gaza, it would signify a dramatic departure from its foundational foreign policies. It could also reignite discontent among its population.
Rejecting the proposal would strain Egypt-US relations, potentially undermining the support for Sisi’s regime, which might then have to seek aid from other countries.
The Gaza conflict underscores Egypt’s historical and political entanglement with the Palestinian issue.
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