By Elise Labott
The ball is now in Egyptian President-elect Mohamed Morsi's court in terms of dialogue with Israel, according to Israeli officials who spoke with CNN's Security Clearance.
But those officials say there are intense concerns about terrorist cells in the Sinai that Egypt needs to get a handle on. Israel is desperate to avoid a military confrontation there.
The officials said that with Morsi, a former Muslim Brotherhood member, it's a bit of wait and see. They believe the domestic challenges he will be facing - the economy, the relationship with the Supreme Council of the Armed Forces, known as SCAF and other issues are so important and pressing that Israel does not expect Egypt's relations with it to be a front-burner issue.
Which is why there are no expectations of immediate war or peace.
The Israeli officials believe Morsi understands keeping the peace treaty between the two nations can be an asset, as it can maintain the so-called peace triangle with the United States, which of course comes with substantial military and civilian assistance.
At some point some new channels may be opened and opportunities seized, but what can be achieved will be apparent only in the long run. The officials are cognizant that Morsi doesn't have a parliament or any concrete power yet and that the Egyptian military will be a critical player. This is seen as good for Israel, because the Israeli military has a good relationship with its Egyptian counterpart and Israel believes the SCAF sees Israel as a strategic asset.
They also expect the technocrats in the Egyptian ministries they have been dealing with to remain for continuity in the near term.
The most important barometer for relations seems to be the Sinai and Gaza. One bad incident could escalate tensions and officials say Israel really wants to avoid a confrontation. For years, although there were some border clashes, former President Hosni Mubarak was able to guide the Palestinians in Gaza to go only so far. And since his ouster, the SCAF has prevented things from completely deteriorating.
But officials say Israel is extremely concerned about cross-border attacks over the past year or so, including a deadly attack last August. In that incident, a group of militants engaged in a string of terror strikes on buses, civilian vehicles and soldiers 20 kilometers north of the resort city of Eilat, Israel, leaving eight people dead. Five Egyptian security troops were killed later the same day, an act believed to be the work of Israeli forces targeting militants in the area - which prompted the dramatic storming of the Israeli Embassy in Cairo by protesters a month later.
Israeli officials say Israel is behaving very cautiously because of the instability in Egypt. They don't want the Sinai to become an area for clashes forcing Israeli troops to enter Egyptian territory. Israel is sending urgent messages to the SCAF, directly and through other channels, about its anxiety.
But an explosive mix of lawlessness along the Egyptian-Israeli border since the fall of Mubarak, trafficking of weapons and people across the border from Sudan and terrorist activity is making the Sinai increasingly unstable, Israeli officials say. They point to terrorists, including some members of al Qaeda, moving freely in the area to target Israel, a fact even Egypt does not deny.
"We now have to face the reality that al Qaeda is present in Sinai," a senior Egyptian intelligence official told CNN last week. " ... Palestinian Islamic Jihadi factions now present in Sinai, along with al Qaeda cells, are active, and we are tracking them down."
Israel is looking for first the SCAF, and ultimately the Morsi government, to keep the border quiet. The SCAF isn't completely skirting responsibility, but it is not concentrating its efforts on the border because it has so many other priorities throughout the country. Officials say that the SCAF has acknowledged to the Israelis that terrorists cells are operating along the border and they are trying to do what they can, but Israel clearly doesn't think it is enough.
The Multinational Force and Observers (MFO) is the main interlocutor whose original job was to monitor the peace treaty, providing peacekeepers in the Sinai. U.S. diplomat David Satterfield, the leader of the MFO, has been intensively consulting with the Egyptians and Israelis. Earlier this week he made an urgent trip to Washington, where he met with Secretary of State Hillary Clinton and probably other U.S. officials.
Another complicating factor, according to the Israeli officials, is competition for control of Gaza between Hamas and other jihadi groups such as Palestinian Islamic Jihad. Although Hamas did launch some rockets over the past few weeks, nobody thinks Hamas wanted the situation to get out of control during the Egyptian elections.
Israel is interested in seeing how the relationship between Muslim Brotherhood and Hamas plays out and, given Morsi's statement that he wants to abide by international treaties, whether he will rein in Hamas.
In the wake of the election, there are lots of questions with no clear answers. For now the name of the game in Jerusalem, according to one official, is "strategic silence." They don't want to rush to any positive or negative conclusions.