No matter who wins the Israel-Iran war, Egypt stands to lose

If Israel wins, it will likely move ahead with implementing its plan to push Palestinians out of Gaza, which could lead to a war with Egypt. If Iran wins, its proxies could further divide the region.

Egyptian Foreign Minister Badr Abdel Aty (R) receives Iranian Foreign Minister Abbas Araghchi in Cairo, Egypt, on 2 June 2025.
Reuters
Egyptian Foreign Minister Badr Abdel Aty (R) receives Iranian Foreign Minister Abbas Araghchi in Cairo, Egypt, on 2 June 2025.

No matter who wins the Israel-Iran war, Egypt stands to lose

Egypt has called for an end to the Israel-Iran conflagration and a resolution via peaceful means. It has several reasons to be against the current escalation, including political, economic, geostrategic, and domestic—and they are all linked to Egypt's plans for the future.

For a couple of years now, Egypt and Iran have been slowly turning the page on their historic animosity. Today, they are more like acquaintances who share the same friends. For instance, they are both members of the BRICS group, which Russia and China dominate.

This Cairo-Tehran rapprochement dates back to March 2023, when Chinese-facilitated talks led to a thaw in relations between Saudi Arabia and Iran. The Egyptians and the Saudis are close allies.

However, before that, five decades of tension between Cairo and Tehran were largely driven by Egypt’s desire to maintain the ‘party line’ alongside its Gulf allies. And ever since Iran vehemently opposed the 1979 Egypt-Israel peace treaty, Cairo has long seen Tehran as a force for regional instability.

AFP
Egyptian President Anwar Sadat, Israeli Prime Minister Menachem Begin, and US President Jimmy Carter sign the Camp David Accords at the White House, September 17, 1978

And to some extent, it still does, given its support for non-state actors such as Hezbollah, the Houthi militia in Yemen, and Hamas. Egypt also disliked Iran’s exertion of influence in Syria and Iraq over recent years.

Yet Egypt developed its own way of navigating ideological differences and regional rivalries. It is friends with the Chinese and the Russians, for example, yet it still can cooperate with the Americans and enjoys excellent relations with the Europeans. An ally of Greece and Cyprus, it is also now developing warm relations with Türkiye. In short, it aims to achieve a balance.

Removing impediments

In 2014, President el-Sisi (who was not yet in office) stated that Egypt's relations with Iran would have to pass through the Gulf states. When Saudi Arabia and Iran shook hands, Egypt was always expected to follow suit—and it did. Earlier this month, Iranian Foreign Minister Abbas Araghchi visited Cairo for the second time in nine months, stating that the last impediment to improved relations with Egypt had already been removed (without specifying what it was).

Iran has made changes in the past to accommodate better relations with Egypt. In 2004, municipal authorities in Tehran announced that they would rename the city's Khaled Islambouli Street to Intifada Street. In 1981, Islambouli assassinated Egyptian President Anwar Sadat for having signed the peace treaty with Israel. Both Cairo and Tehran appear to have their own motivations for initiating a new phase in bilateral relations.

By settling the row over Iran's nuclear programme by force, Israel is nipping Egypt's developing strategy in the bud

Egypt faces a rapidly changing regional landscape, with US President Donald Trump adopting a transactional approach to relations with states in the Middle East. Held back by its economic problems, Egypt seems to offer little to the White House. It has refused to take in Palestinian refugees, refused to pay for US air strikes against the Houthis in Yemen (whose attacks on ships are costing Egypt billions of dollars) and is a major hurdle to the fulfilment of Trump's dream: turning the Gaza Strip into a new "Riviera".

Cairo's calculus over the past two years has factored in improved relations with Tehran, and before this current war began, Egypt sought to build the necessary political capital such as by inviting Aragchi to Cairo to meet the head of the International Atomic Energy Agency, and by offering to mediate over Iran's nuclear facilities if needed.

By settling the row over Iran's nuclear programme by force, Israel is nipping Egypt's developing strategy in the bud, at least for now. Its actions will have huge implications for the region, including Egypt. It could also lead to the political exit of either Israel's Benjamin Netanyahu or Iran's Supreme Leader.

For Egypt, economic losses from the war compound political ones, especially if the Houthis get more intensely involved. Missile attacks against Israel from Iran and Yemen have led to Tel Aviv shutting down Mediterranean gas fields and suspending supplies to Egypt. For an energy-hungry Cairo, this has led to a scramble to source alternatives. In truth, Egypt has grown accustomed to the painful financial fallout from regional violence and has a range of backup plans, but these often mean wading deeper into indebtedness.

Omar AL-QATTAA / AFP
Palestinians walk along Gaza's coastal al-Rashid Street to cross the Netzarim corridor from the southern Gaza Strip into the north on January 27, 2025.

Dangers of an Israeli victory

The result of this war should be a main concern for all regional states, now that a new Israeli-led regional order is in the making. A victory for Tel Aviv over Tehran will augur far-reaching consequences for the region. Emboldened by victory, Israel will most likely move ahead with implementing its plan for Gaza, removing its population and ending a Palestinian presence in the occupied West Bank altogether.

Such a scenario could lead to war between Egypt and Israel. If Egypt chooses to avoid war and look the other way as Palestinians are silently liquidated, Israel will simply keep waiting for the moment when it can pick the next fight and rid itself of the last barrier to regional hegemony.

On the other hand, although it is highly unlikely that Iran will win this war with Israel, if it did, it would let Tehran resurrect its proxies and germinate others, ultimately forcing the region into submission and fragmentation. For all these reasons, Cairo wishes the war between Israel and Iran had never started.

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