Israel's southern cities were bombarded by rocket and missile fire from Gaza as the weekend approached. There had been talk of a cease-fire at the beginning of the week, but this situation is actually a new form of tahadiyeh (lull ): It has different rules than the one after Operation Cast Lead two years ago. When Israel has an opportunity to attack, it does so, as it did Wednesday, killing Islamic Jihad operative Ismail al-Asmar in an air strike. That bombing sparked a new flare-up. The Palestinian organizations, for their part, are no longer just firing missiles at the communities around Gaza; they're quickly responding with fire on large cities such as Be'er Sheva and Ashdod.

Israel's relative restraint was due in part to a decision not to launch a large-scale attack on Hamas last week - in order to avoid an escalation in Gaza on the eve of the UN General Assembly discussion concerning a Palestinian state, and to avoid a confrontation with Egypt. But this policy might boomerang. According to a report on Army Radio yesterday, the Shin Bet security service had information that could have thwarted the terrorist attack on the Israel-Egypt border last week - but the army and the political echelon were overcautious and ignored the recommendation to take preventive action, due to concerns that this would spark a diplomatic crisis with Egypt.

One of Egypt's largest anti-Israel demonstrations in recent years is scheduled to take place in Cairo today. The protesters will again call for expelling the Israeli ambassador, a demand that first arose after six Egyptian soldiers were killed amid the terror attack last Thursday.

It's not clear what Cairo expected Israel to apologize for. Egyptian security sources revealed this week that at least three of the terrorists involved in the attack were indeed Egyptian citizens. The attack was perpetrated by four terrorist squads and more than 10 armed terrorists, who used missiles and bombs to attack two buses and two vehicles on Highway 12, as well as Israeli troops responding to the initial attack.

A Haaretz investigation found a high probability that the attack was not only planned and executed under the nose of the Egyptian police, but that some policemen may have been handsomely paid by the terrorists to ignore what was happening immediately below their border outpost.

Cairo also apparently understood what had happened. Egyptian Foreign Minister Mohammed Kamal Amr explained that it was in his country's interest to have an ambassador in Israel, while Egyptian media stated that Egyptian citizens had been involved in the terrorist attack. Ultimately, both countries' interests prevailed over the mob.

At another anti-Israeli protest earlier this week, the Egyptian public crowned a hero for a day - one Ahmed Shahat, who climbed the 13-story Israeli Embassy building in Cairo and removed the Israeli flag from the roof. At the protest, thousands called for annulling the peace treaty, but it seems like Egypt's decision makers understand that the country's economic survival depends in no small measure on U.S. assistance.

Egypt has been crippled by lost tourism revenues, formerly the country's most critical industry. The Sinai Peninsula, which until recently was a magnet for visitors from all over the world, particularly Israelis, has become a haven for World Jihad activists. This explains why Egypt urgently sent 1,000 troops with armored vehicles into Sinai, in an attempt to restore control, at least in El Arish, Rafah and Sharm el-Sheikh.

Sinai is too vast for the army to control entirely, so instead it is focusing on those towns. Some of the Bedouin tribes are cooperating with the Egyptian authorities, others with Al-Qaida or other terror groups, and some are cooperating with everyone. The Egyptian government is trying to regain control in Sinai by helping the Bedouin. However, it is far from clear whether this investment will bear fruit anytime soon.

Egypt's army, still well regarded, is the only body still trying to combat Islamic terrorism and block arms smuggling into Sinai. Cairo knows that the partnership between the Gaza-based Popular Resistance Committees and World Jihad activists in Sinai, as evidenced in last week's terror attack, could take up Egyptian targets as well. Accordingly, Defense Minister Ehud Barak and President Shimon Peres' expressions of regret over Egyptian casualties at least prevented the mini-diplomatic crisis from swelling into a full-blown rift.

Venting frustration

The terrorist attack last week was conceived by the Popular Resistance Committees, an organization of Fatah breakaways in Gaza, which has forged extensive ties with Hamas and World Jihad groups in Sinai. The smuggling industry facilitated by the tunnels enabled PRC operatives to enter Sinai from Gaza for reconnaissance missions along the border with Israel. They monitored the army's movements and predicted the soldiers' response to the initial attack.

However, the uncertainty concerning the terrorists' identity generated mountains of conspiracy theories. Most off-the-wall was Richard Silverstein on his blog Tikun Olam. In the wake of the report that three of the killed terrorists were Egyptian citizens, Silverstein intimated that Benjamin Netanyahu and Ehud Barak bombed Gaza to divert attention from Egypt. He even said Israel's latest bombings in Gaza were war crimes.

Israel does not yet know whether Hamas had prior knowledge of the attack. There is no intelligence that Hamas authorized the operation, but it is likely that the movement knew about it during the planning and decided not to thwart it. After the assassination of the PRC leadership last weekend, Hamas did not try to prevent the PRC and Islamic Jihad from launching rocket attacks on Israel. It apparently wanted to let the organizations vent their frustration until Israeli pressure forced them to stop. The PRC rampaged for three days, and then decided to stop.

Some members of Hamas' military wing support the small organizations and rocket/suicide attacks on Israel; others oppose them. Hamas turns a blind eye to some of the Islamist organization members because they used to be in Hamas. Meanwhile, it persecutes other extremist groups.

Hamas' political leadership in Gaza does not want an escalation, but because of its decentralized structure, each sector makes different decisions. The differences are apparent in the West Bank as well. Whereas top Hamas officials say they do not want to see a resumption of suicide attacks from the West Bank, some members of the organization reject this policy.

The Israeli media praised politicians, notably Barak and Netanyahu, for showing restraint after the terror attack and the rocket attacks on Ofakim, Be'er Sheva and elsewhere. Hamas, Islamic Jihad and others interpret this as "the Israelis are afraid."

In contrast to Operation Cast Lead, when Israeli deterrence halted organizational activity in Gaza, it's likely that after the latest round, the Hamas operatives and the rocket squads - who are probably not under any supervision - will be more inclined to squeeze the trigger.

Next target
According to news agency reports, Iran has decided to halt its economic aid to Hamas, because it did not publicly support Syrian President Bashar Assad. But the Hamas leadership in Damascus has avoided being seen as serving foreign interests, unlike Hezbollah in Lebanon.

This week, Assad's army tuned down its violence against demonstrators. But constantly hovering over the Syrian president's head is the shadow of "No. 1 wanted man," Muammar Gadhafi. Gadhafi's fall will spur on Syrian protesters, which may push the army to use much more violence in response. Assad knows he could become the international community's next target. But without aggressive international intervention, Tripoli and Damascus will remain far, far apart.