Over the past few weeks, Egypt and Israel have reached the lowest point in their relations in thirty years of peace. The attack in Eilat and Israel's killing of eight Egyptian policemen on the Sinai border led to a diplomatic blame game that was only exacerbated by the Egyptian mob attack on the Israeli Embassy in Cairo in early September. Top diplomats managed to prevent a disaster at the embassy, but the Israeli and Egyptian concerns over the episodes remains high.

The key question now is what could both countries do to normalize, if not further improve their bilateral relations? Conventional wisdom suggests that Israel should reach a final-status agreement with the Palestinian Authority to establish an independent Palestinians state. This would presumably dry up the source of anti-Israel sentiment in Egypt. However, due to the inherent intractability of the core issues of the conflict it is unlikely that the Israeli-Palestinian negotiations will resume any time soon or that an agreement will be reached in the short term. As neither Israel nor Egypt is interested in further deterioration in their bilateral relations, a new policy that can be implemented fully and efficiently is urgently required.

The peace treaty between Egypt and Israel remains a cornerstone for regional stability and it is in both countries best interests to ensure its sustainability. On several grounds, peace with Israel is critical for Egypt. Primarily, the peace serves Egypt's interest because it restored the Sinai, leaving Egypt with absolutely no territorial claims against Israel. A new conflict with Israel could change the status quo, which will most likely be to Egypt's disadvantage. Moreover, the preservation of the Israeli-Egyptian peace treaty will prevent another deliberate or accidental armed confrontation that would heavily tax the Egyptian economy. Egypt would have to allocate billions of dollars out of its limited budget for more arms and training, and it would likely lose U.S. financial and military assistance. This would cause grave economic difficulties at a time when the country needs increasingly more financial assistance for development from the international community.

Finally as long as Israeli-Hamas relations remain hostile, Egypt should avoid getting involved in a new conflict between two enemies. Maintaining peace with Israel will allow Egypt to play a more constructive role, both in times of conflict and certainly when reconciliation between Israel and Hamas becomes a viable option. In fact it is in Egypt's national security interests to work quietly and consistently behind the scenes to persuade Hamas to accept Israel, not only to ensure the long-term prospect of a comprehensive Israeli-Palestinian peace, but to help restore Egypt's regional leadership role. The key intermediary role Egypt played between Israel and Hamas to reach the recent prisoner exchange deal between the two is a case in point.

While Egypt should remain committed to its treaty obligations, it must take symbolic and practical steps to ensure that its bilateral peace treaty with Israel fosters greater regional security by taking specific measures to insure: 1) the security of the Israeli diplomatic mission; 2) the security of the borders with Israel and protection of the gas pipeline; and 3) the prevention of weapon smuggling into Gaza, which contributes to instability in the Sinai. The recent news about the Egyptian government launching a campaign to crack down on smuggling in Sinai, including establishing a 5-kilometere buffer zone along the border with Gaza, is a step in the right direction.

The Egyptian government should encourage a dialogue with its citizens through a variety of channels, including think tanks, public and private institutions, and the media to explain why maintaining peace with Israel serves Egypt's own interests. The statement by Foreign Minister Mohamed Kamel Amr on September 26th to the Associated Press that "Egypt will always respect its landmark peace treaty with Israel" bodes well, but Egyptian media and public-opinion makers should take action to convey this message to their audiences. Conspiratorial allegations that blame Israel for domestic shortcomings ranging from cancer-causing agricultural products, to Muslim-Coptic sectarian violence, to the resurrection of the counter-revolution forces not only mislead the public, but also harm Egypt's interests and makes it nearly impossible to defend the peace treaty.

The peace treaty with Egypt is as critical for Israel as it is for Egypt. It is widely held that without Egypt there will never be a major Arab-Israeli war, and without Syria there will never be a comprehensive Arab-Israeli Peace. By maintaining peace with Egypt, Israel will continue to save billions on military expenditure that could otherwise be allocated to economic development, especially as the gulf between the very rich and the very poor is widening.

At the regional level, peace with its neighbor to the west allows Israel to focus on other conflicts that have a better prospect of being resolved as long as the peace treaty with Egypt holds. By contrast, destabilized relations with Egypt could lead to a radicalized Arab world that would undermine Israel's strategic interests on two fronts: First, it would alienate the most significant Arab state -- Egypt -- along with the Gulf states from the coalition dedicated to preventing a nuclear Iran, and secondly, it would reduce the United States' influence in the Middle East, which would affect Israel adversely and increase the tension between Israel and the European Union.

Israel should seek to improve relations with Egypt and engage the Egyptian transitional government instead of acting on Netanyahu's futile "wait-and-see" attitude. Some of the immediate steps to heal the relations should include fully restoring the Israeli diplomatic mission in Cairo as long as security is assured, and openly supporting the general Arab outcry for freedom while being positive in its public narrative about the Egyptian transition. Israel's recent official apology over the accidental killing of Egyptian policemen on the border would certainly help rectify the dispute that outraged the Egyptian public. Any Israeli government, especially the current one, should resist creating more enemies in an already hostile neighborhood. This requires Israel to refrain from reacting to occasional politically incorrect statements made by Arab leaders that are often made for public consumption, for example the one made by Egypt's Prime Minister Essam Sharaf in mid-September that the peace treaty "is not a sacred thing and is always open to discussion." Israel reacted by summoning the Egyptian ambassador in Tel Aviv for clarification, though the statement, neutral as it is, was clearly rhetorical. In the same vein, while the Muslim Brotherhood may well become a significant player in Egypt, Israel should not automatically designate the party as a natural enemy. In the words of former chief of the Mossad Meir Dagan, "they [Muslim Brotherhood] themselves fear that this [takeover] would irreparably harm the Egyptian economy."

Finally, it would be strategically rewarding for Israel to use its influence in Washington and other major European capitals to support, and even openly, advocate for continued economic assistance to Egypt by the international community to ensure economic development, which is the key to nurturing democratic reforms. More quietly, Israel should work through the bilateral channels to further ease the blockade of Gaza while ensuring that no weapons are smuggled into the Strip. For that purpose, Israel may consider amending the peace treaty to allow larger Egyptian military units to operate in the Sinai. This would not only enhance Egyptian-Israeli mutual security, but also address Egyptian sensitivity towards the issue.

Egyptian and Israeli leadership must recognize the mutual advantages and current limitations of their peace treaty. The steps outlined above would further strengthen the foundation of the treaty, and prevent a situation in which any incident from severely undermining the treaty and risk a significant shift in the region's political and military dynamic, which would be to both countries profound disadvantage.

Alon Ben-Meir is a Professor of International Relations at the Center for Global Affairs, New York University, Amr Yossef is a Post-Doctoral Fellow at the Taub Center for Israel Studies, New York University.