Last Updated: Tue Oct 04, 2011 13:34 pm (KSA) 10:34 am (GMT)

Pentagon chief in bid to defuse Egypt-Israel tensions; report says Cairo sees new gas deal

The U.S. government is attempting to ease tension between Egypt and Israel, whose long truce has lately faced strains. (File photo)
The U.S. government is attempting to ease tension between Egypt and Israel, whose long truce has lately faced strains. (File photo)

U.S. Defense Secretary Leon Panetta headed to Cairo from Tel Aviv on Tuesday in an effort to defuse tensions between Egypt and Israel that have mounted since the end of Hosni Mubarak’s rule, amid reports that Egypt will soon finish drafting a new contract for gas exports to Israel that includes a big increase in prices.

Before flying out after a one-day visit to Israel, Panetta said he will seek to encourage both sides to ease friction over the Sinai and will ask Egypt’s military rulers to release an alleged Israeli spy, according to AFP.

Ilan Grapel, a U.S.-Israeli dual national, is accused of spying for Israel and has been in custody since June 12 but Israeli officials say it is all a mistake.

Speaking to reporters in Tel Aviv on Monday, Panetta said he hoped Grapel would be released but did not say whether the accused would be freed during his visit to Cairo as reported by some media.

“There’s really nothing I can say about the specifics of that,” Panetta said.

“We have made our concerns known to the Egyptians about holding that individual,” he said.

“We would hope that whether it happens with me, or whether it happens at some point in the future, that they do take steps to release that individual.”

Grapel has been charged with being an agent of Israel’s Mossad intelligence service and of sowing sectarian strife in Egypt during the uprising which ousted longtime U.S. ally Mubarak in February after three decades in power.

Egypt said on Saturday it was considering releasing Grapel.

Tense relations

Relations between Egypt and Israel, which have been bound by a peace treaty since 1979, have entered a turbulent period since Mubarak's overthrow.

The end of the veteran strongman’s rule has coincided with uprisings across the Arab world that could give greater voice to popular anger over Israel’s treatment of the Palestinians.

Panetta expressed concern that Israel was “increasingly isolated” in the diplomatic arena and needed to work to shore up its relations in the region, particularly with Egypt and Turkey.

Speaking to reporters before his arrival in Tel Aviv on Monday, Panetta said Israel and Egypt needed to engage “directly” to defuse problems in the Sinai peninsula.

Israel has said an attack on its south in August was mounted from the Egyptian territory and has expressed concern that a “security vacuum” has developed there since Mubarak’s fall.

In Cairo, Panetta is also due to discuss Egypt’s plans for elections and a transition to a civilian-led government in talks with Egypt’s military ruler Field Marshal Hussein Tantawi and Prime Minister Essam Sharaf.

The Pentagon chief planned to reassure Cairo of Washington’s commitment to the two governments’ longstanding security ties.

He will also “encourage the transitional government to take the necessary and irreversible steps to clear the way for democracy,” said a senior defense official, who spoke on condition of anonymity.

Panetta met Egyptian Foreign Minister Mohammed Amr last week in Washington.

Lifting emergency law

Ahead of his arrival in Cairo, Tantawi said the state of emergency would be lifted “on condition that the security situation stabilizes,” in remarks published in the state-owned al-Ahram newspaper.

U.S. Secretary of State Hillary Clinton said last week she hoped Egypt would lift the emergency well before June next year when the powers granted by the Mubarak-era parliament run out.

“We want to see this as soon as possible,” she said, adding that it was a key step to “create the context for free and democratic elections.”

After a day of meetings in Cairo, Panetta is due to fly to Brussels to meet NATO defense ministers who plan to discuss the allied air campaign in Libya and the war effort in Afghanistan.

Gas deal with Israel

An Egyptian newspaper, meanwhile, reported on Tuesday that Egypt will soon finish drafting a new contract for gas exports to its neighbor Israel that includes a big increase in prices.

Gas supplies to Israel have been disrupted by a series of attacks on the pipeline in the Sinai border region by assailants believed to oppose the sale of gas to the Jewish state, AFP reported.

The attacks became more frequent and supplies were halted after the overthrow of Mubarak in February.

Egypt’s army-backed government, under popular pressure to toughen its stance towards Israel, has sought to renegotiate the terms of the gas deal, complaining that the previous agreement signed under Mubarak fixed prices below market rates.

“The final draft related to amending the prices for exporting natural gas to Israel will be completed soon. It will see a big increase in the price,” newspaper al-Ahram reported, citing Petroleum Minister Abdullah Ghorab.

He said gas supplies to Israel were still suspended after the latest attack on the pipeline in Sinai in late September, al-Ahram reported.

Egypt is also seeking to renegotiate prices of gas exports to Jordan, which have also been disrupted by the attacks.

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