The recent Egyptian-mediated rapprochement between the Palestinian groups Fatah and Hamas, followed by the re-opening of the Rafah border of the Gaza Strip are historic moves. The former will unify and strengthen the Palestinian cause while the latter indicates the first major shift in Egyptian policy post-Mubarak.
Under Hosni Mubarak's US-backed dictatorship, Egypt was a primary facilitator of Western policy in the Middle East -- upholding Israel's blockade of Gaza from 2009, and violently quashing Islamist uprisings during the 1990s.
Now however, the interim military junta is clearly seeking to distance itself from such pro-West policy and towards a more expansive, independent outlook.
Back in February, Egypt began its new era 12 days after Mubarak resigned by allowing two Iranian warships to pass through the Suez Canal, reportedly the first transit of its kind since 1979. When questioned about this by the Washington Post, foreign minister Nabil el-Araby was oblique, but eventually stated that despite previous tensions "Iran is not an enemy" -- firmly putting clear blue water between the old and new Egypt.
Since then Egypt has been swift to make its position on other key issues known, especially the Palestine question. As a result, Egypt has curried the favour not only of Hamas, but also that of Hezbollah in Lebanon, who praised them for releasing two imprisoned members and for breaking the siege on Gaza.
Egypt's new political leverage with two of the Middle East's largest and most influential Islamic organisations holds the potential for further historic moments. Indeed, Egypt is moving steadily into a position where it may be able to negotiate the sorts of concessions needed to re-start the peace process between Israel and the Palestinians.
Further, regaining its position as an Arab leader, Egypt could eventually gain the power to steer Hezbollah and Hamas away from Iran, which could then be used to promote substantive democracy in countries like Syria and Lebanon, both of whom are currently under considerable Iranian influence.
At the moment, the Egyptian elite is remaining prudent -- being careful not to alienate any important international actors. However, a recent Pew Research poll betrayed Egyptian grassroots sentiment, showing that 54 per cent of Egyptians want the Camp David Accords with Israel annulled. Though Nabil el-Araby has since stated that this will not happen, it would not be surprising if some Egyptian political parties began campaigning for it anyway, prior to September's parliamentary election.
Such actions would strain the prospect of peace rather than nurture it, and provide Israel with yet another excuse to continue with its policy of belligerence and stubbornness with the Palestinians. The recent detention of an alleged Israeli spy in Cairo accused of trying to incite sectarian tensions and manipulate the security vacuum will only serve to make relations between Egypt and Israel more fraught, and could be the pretext for a policy of bellicosity with Israel.
The Egyptian economy remains a concern. A Gallup poll suggested that 53 per cent of Egyptians believe that economic conditions are getting worse. Barack Obama recently announced an aid package for Middle Eastern countries including Egypt, but Egyptians are cynical of this, and may not wish their new democracy to be immediately saddled with debt to the World Bank and the IMF. Nonetheless, Egypt must work on reducing poverty and inequality, which were some of the main factors leading to the revolution.
Many have speculated on the Islamisation of Egypt, with the help of the Muslim Brotherhood's party, Freedom and Justice. Recent clashes between Christians and Muslims provide a stark picture of re-emerging sectarian divides, but the values of the revolution appeared overwhelmingly secular, and it would be hard to imagine Islamic fundamentalists ruling Egypt as a result. Even if Freedom and Justice did win a majority, Egypt would not be like Iran, and would still have opposition politicians, scheduled elections, and the right to protest. It is also useful to remember that the Muslim Brotherhood is not on the US Foreign Terrorist Organizations list and has long officially renounced violence.
Egypt may find itself caught in an awkward position in the coming months as it attempts to carve out its new standpoint. It must balance the interests of various conflicting international powers with the desires of its own citizens, and also restructure its economy. Democratisation will certainly not be easy, but the early signs are pointing towards Egypt as a revived Arab force operating on its own terms with the potential to have a large say on issues like the Israel-Palestine peace process and Iran. Nevertheless Israel's cooperation is necessary on the former issue, and at the moment it looks like its reaction to the new Egypt is tepid at best.
Still, the new Egypt, divorced from the West, could actually prove a more positive actor in the long run.