The latest confrontation between Israel and Hamas, which ended with the announcement of a ceasefire on the evening of November 21, had its roots in Egypt. On August 5, sixteen Egyptian soldiers were killed by militants crossing into Egypt from Gaza. During the attack the militants seized two Egyptian Armored Personnel Carriers and attempted to attack Israeli forces at the Kerem Shalom crossing. Hamas, which is an ideological offshoot of Egypt’s Muslim Brotherhood, temporarily shut down access to the tunnels connecting Gaza with Egypt. The tunnels had been used to bring construction and military materials into Gaza. Since the August attacks, Egypt has closed down much of the heavy traffic through the tunnels by bulldozing its end of the throughways. This crackdown on the tunnels, when combined with the ongoing blockade on Gaza, led to rising prices in Gaza and an economy that was grinding to a halt.
Before the August attack, the tunnels were fueling a rapidly growing economy despite the Israeli blockade. If some estimates are to be believed, Gaza’s economy leaped from 6 percent growth in 2008 to 27 percent growth in 2011. Those are remarkable statistics for a community that was supposed to be under siege. In a September 30 article published in the Hamas-backed newspaper, Filastin, Dr. Yusuf Rizqah, an adviser to Hamas’s Prime Minister Ismail Haniyeh, wrote that “Gaza’s tunnels represented a genuine outlet for construction and reconstruction materials. The tunnels have become an artery of life for the Gaza Strip … without a normal trade route, Gaza will never accept the closure of the tunnels. In so doing, Gaza will be killing itself or better, committing suicide and sentencing the people of Gaza to death.” The strong language used by Rizqah underscored the importance of the tunnels not only to Gaza’s economy but also to Hamas’s ability to rule Gaza. Writing in The New York Review of Books, Nicolas Pelham noted that there are a group of 600 “tunnel millionaires” in Gaza. It may be fair to say that without the tunnels as steady source of independent revenue from which to tax and distribute patronage, Hamas’s power would erode.
During the last three months, as a result of Egyptian policing, tunnel traffic dwindled to a third of pre-August 5 levels, and if Israel had not eased its restrictions on goods into Gaza prior to the latest conflict, the damage to the economy in Gaza would have been much worse. On September 30 and October 1, there were large protests in Gaza at the Rafah border crossing in response to the rising prices of construction materials and fuel. The protests were directed at Egypt as much as at Israel.
And therein was the paradox for Hamas: Hamas was born out of the Egyptian Muslim Brotherhood. It shares the Muslim Brotherhood’s ideology and worldview, and it views its political and economic future as closely aligned with the fortunes of Muhammad Mursi’s Egypt. Hamas’s ambition had been to replace the tunnels between Egypt and Gaza with a legitimate free-trade zone along the border. Not only was there no progress on this front, but Egypt was locking down the Gazan tunnels, damaging Hamas politically, and Gaza economically.
In a delicately written article published in Filastin on October 2, Rizqah outlined the heart of the problem: “Gaza is complaining to Muhammad Mursi about its burdens and pains, but it is not complaining about him [emphasis added]. The difference between the two is as significant as the difference between love and hatred.” Rizqah’s comments reflected the political tightrope Hamas was trying to walk with respect to Mursi and Egypt. On the one hand, Gaza was being squeezed by Egypt in the wake of the August attack at Kerem Shalom, but on the other hand, Hamas was reluctant to place the blame on Mursi and Egypt.
Hamas was in a bind. Its authority in Gaza was being increasingly challenged by Gaza-based salafi-jihadi groups affiliated with al-Qa‘ida (groups such as Ansar Jerusalem, Tawhid and Jihad, and Ansar al Sunnah, and their umbrella organization, Mujahideen Shura Council), who had been attacking both Israel and Egypt regularly in 2011 and 2012. In the wake of the August 2012 attack at the Kerem Shalom crossing, Hamas was pressured by Egyptian officials to crack down on these salafijihadis. And that is when Hamas began playing its double-game. It attempted to satisfy Egypt, as well as placate its salafi-jihadi rivals in Gaza by publicly announcing the arrest and detention of suspects involved in the Sinai attacks while later quietly releasing those same suspects.
Israeli forces, which for some time had been coming under increasing attack from Gaza, were not interested in the subtleties of Hamas’s double-game. On the night of October 12, an Israeli drone killed Abu Walid al-Maqdisi, the 43 year-old leader of Gaza-based Tawhid and Jihad—one of the groups that was suspected in the August 5 attack on Egypt and Israel at the Kerem Shalom Crossing. Maqdisi had been released by Hamas just two days before the August attack. In response to his midOctober death, Maqdisi’s group vowed to convert Gaza into an Islamic state, fire rockets at Israel, and launch attacks inside Sinai, which put the Egyptian military on alert.
The resulting confrontation between Israel and Gaza was, in part, a product of Hamas’s poorly managed double-game, which backfired. Hamas was attempting to satisfy its would-be Egyptian patrons that it was cracking down on Gaza’s salafijihadis, in the hope of broadening its legitimate trade relations with Mursi’s government, but, at the same time, it was permitting the same salafi-jihadis to have a free hand to act against Israel.
The salafi-jihadis stepped up their attacks against Israel during the last two weeks of October, which were not limited to just an increasing volume of rockets against civilian population centers. They also conducted increasingly bold ground operations against Israeli forces at the border fence between Israel and Gaza. These operations were designed to ambush and capture Israeli soldiers, in the same fashion that Hamas had captured Gilad Shalit in 2006. Israel was determined to push militants back from the border fence on the Gaza side, which Hamas, for its part, resisted as a violation of its sovereign authority.
This spiral of escalation between Israel and Gaza-based militants culminated in an anti-tank missile attack on an Israel Defense Force jeep on November 10 that injured four Israeli soldiers, two critically. There was also a noticeable escalation in the volume of rocket fire into southern Israel, which in all likelihood was sanctioned by Hamas. The escalation from Hamas represented a miscalculation about Israel’s will to respond as well as perhaps Hamas’s inability to exercise full control over the salafi-jihadi groups operating within its territory. Whatever the case may be, Israel could not ignore the escalation, and was forced to take action in order to deter further attacks and reassure its citizens that it was capable of protecting them. The result was Israel’s liquidation of Hamas’s military commander, Ahmad Ja‘abari, followed by eight days of continuous Israeli aerial attacks against Hamas targets, including its Iranian-supplied missiles capable of striking at targets in central Israel, and intensive Hamas rocket attacks against Israel.
Whether intentional or not, in sparking the fighting, Hamas placed Muhammad Mursi’s government under enormous pressure to undermine Egypt’s peace treaty with Israel. This was a dangerous game that Mursi surely did not want to play. Hence, the Egyptian president made a shrewd effort to capitalize on the events without risking Egypt’s vital security interests.
In the midst of the fighting, Abdel Bari Atwan, the editor-in-chief of the London based al-Quds al-Arabi, triumphantly declared that “Here is the Egypt that we have been waiting for,” praising Mursi for bringing dignity at long last to the post-1967 Arab world. But apart from symbolic support, Mursi was careful not to provide Hamas with any material aid or to threaten Israel with active Egyptian involvement in the conflict.
It seems that Mursi understood it was in the Muslim Brotherhood’s interest to bring the fighting to a swift end. The longer the fighting continued, the greater the domestic political pressure Mursi and the Brotherhood would have faced to do more than simply make fiery speeches in defense of Arab and Islamic solidarity. Mursi was no doubt wary that Egypt’s salafi party, al-Nour, would seek to exploit the crisis at the Brotherhood’s expense. Further, a passive Egypt may have ignited renewed jihadi activity in the Sinai.
Hence Mursi, working in cooperation with the Obama administration, used Egyptian good offices to head off a potential Israeli ground invasion and broker the ceasefire. It may be no small coincidence that just two days earlier, the International Monetary Fund (IMF) had announced a preliminary agreement to loan Egypt $4.8 billion.
Yet it is not clear that the ceasefire resolved any of the outstanding issues that directly led to the crisis, such as whether Egypt will allow Hamas to officially open the Rafah border crossing in lieu of reopening the tunnels, whose closing precipitated the events that led to the conflict. This is a sensitive issue because officially opening Rafah would mean de facto recognition of Hamas as the sovereign authority over Gaza, and come directly at the Palestinian Authority’s expense, something Egypt had been trying to avoid. The ceasefire also sidestepped Israel’s concern that Hamas will resume smuggling weapons into Gaza via Sudan and the Sinai.
It appears that Mursi decided to use the ceasefire to play his own double-game. Just thirty-six hours later, Mursi put the newly earned American goodwill to the test by declaring that presidential authority in Egypt would be shielded from judicial review until a new constitution was ratified. In other words, Mursi was attempting to parlay the political capital he earned with the Americans into absolute freedom of action for the Brotherhood in Egypt’s domestic political arena. It remains to be seen whether either side of Mursi’s gambit—the fragile Hamas-Israel ceasefire or the transparent domestic power grab—will hold. The first tranche of IMF funds is not due to be released until the final loan approval is confirmed on December 19. Whether or not Mursi overplayed his hand and thus put the IMF loan at risk remains to be seen.
 This Note was originally published as an E-Note by the Foreign Policy Research Institute as “Israel, Hamas, and ‘the Egypt We Were Waiting For.’” It has been updated with minor edits
 Nicolas Pelham, “Gaza: A Way Out?” New York Review of Books, 26 October 2012. http://www.nybooks.com/blogs/nyrblog/2012/oct/26/gaza-isolation-way-out/
 David Barnett, “Mujahideen Shura Council is consolidation of Salafi-Jihadist groups in Gaza: sources,” The Long War Journal, 14 October 2012. http://www.longwarjournal.org/archives/2012/10/mujahideen_shura_cou.php
 Nicolas Pelham, “Gaza: A Way Out?”, New York Review of Books, 26 October 2012. http://www.nybooks.com/blogs/nyrblog/2012/oct/26/gaza-isolation-way-out/