Introduction

On March 26, 1979, sixteen months after Egyptian President Anwar Sadat's dramatic visit to Jerusalem, Israel and Egypt - long standing enemies - signed a peace treaty on the lawn of the White House in Washington, DC.

Anwar Sadat, Jimmy Carter, and Menachem Begin on the White House lawn.

This peace drive, however, did not begin with Sadat's trip to Israel, but rather came only after more than a half-century of efforts by early Zionist and Israeli leaders to negotiate peace with the Arabs. Every government in Israel's history had declared its desire to live in peace with all Arab states, including those who had ruthlessly attacked the Jewish state in 1948 and again in 1967 and 1973.
Israeli Prime Minister Menachem Begin, like Sadat, was willing to go the extra mile to achieve peace. Although he faced intense opposition from within his Likud Party, Begin froze Israeli settlements in the West Bank to facilitate the progress of negotiations. Despite the Carter Administration's tilt toward Egypt during the talks, Begin remained determined to continue the peace process. In the end, he agreed to return to Egypt the strategically critical Sinai — 91 percent of the territory won by Israel during the Six-Day War — in exchange for Sadat's promise to make peace.
In recognition of his willingness to join Sadat in making compromises for peace, Begin shared the 1978 Nobel Peace Prize with the Egyptian leader.

Risks for Peace

Israel - which had repeatedly been the target of shipping blockades, military assaults and terrorist attacks staged from the Sinai - made far greater economic and strategic sacrifices in giving up the region than Egypt did in normalizing relations with Israel.
While it received additional U.S. aid for withdrawing, Israel gave up much of its strategic depth in the Sinai, returning the area to a neighbor that had repeatedly used it as a launching point for attacks. Israel also relinquished direct control of its shipping lanes to and from Eilat, 1,000 miles of roadways, homes, factories, hotels, health facilities and agricultural villages.
Because Egypt insisted that Jewish civilians leave the Sinai, more than 7,000 Israelis were uprooted from their homes and businesses, which they had spent years building in the desert. This was a physically and emotionally wrenching experience, particularly for the residents of Yamit, who had to be forcibly removed by soldiers from their homes.

Map of Israeli Withdrawal from Sinai

Israel also lost electronic early-warning stations situated on Sinai mountaintops that provided data on military movement on the western side of the Suez Canal, as well as the areas near the Gulf of Suez and the Gulf of Eilat, which were vital to defending against an attack from the east. Israel was forced to relocate more than 170 military installations, airfields and army bases after it withdrew.
By turning over the Sinai to Egypt, Israel may have given up its only chance to become energy-independent. The Alma oil field in the southern Sinai, discovered and developed by Israel, was transferred to Egypt in November 1979. When Israel gave up this field, it had become the country's largest single source of energy, supplying half the country's energy needs. Israel, which estimated the value of untapped reserves in the Alma field at $100 billion, had projected that continued development there would make the country self-sufficient in energy by 1990.
Israel also agreed to end military rule in the West Bank and Gaza, withdraw its troops from certain parts of the territories and work toward Palestinian autonomy. The Begin government did this though no Palestinian Arab willing to recognize Israel came forward to speak on behalf of residents of the territories.
In 1985, Egyptian soldier Suleiman Khater carried out an unprovoked attack on a group of Israeli tourists at the Ras Burqa beach resort in the Sinai Peninsula, killing seven, including four children. He was swiftly apprehended and sentenced to life imprisonment, but his death in a military hospital in January 1986, reported as a suicide, has been contested. Egyptian media and testimonies from friends and relatives suggest that Khater was likely killed by prison authorities. Khater’s actions sparked outrage in Israel and strained the Egypt-Israel peace, though many in the Arab world, including Iran, hailed him as a hero. Egypt later issued a formal apology and compensated the victims’ families. The Ras Burqa massacre marked a significant shift in the relations between Israel and Egypt, cooling the peace that had initially flourished following their 1979 peace treaty. Egyptian authorities’ slow response and portrayal of Khater as mentally ill further fueled tensions despite efforts to downplay the incident domestically.
In 1988, the Jewish State relinquished Taba — a resort built by Israel in what had been a barren desert area near Eilat — to Egypt. Taba's status had not been resolved by the Camp David Accords. When an international arbitration panel ruled in Cairo's favor on September 29, 1988, Israel turned the town over to Egypt.
More than three decades have passed since Israel and Egypt signed their treaty and peace has been maintained. Still, it is regarded as a cold peace because relations between the two peoples have not significantly improved and, in the wake of the Arab Spring national uprising in 2011, have even slightly deteriorated. Trade and tourism are primarily in one direction - from Israel to Egypt. Under former president Hosni Mubarak, the government-controlled press and the intellectual elite remained hostile toward Israel and anti-Semitic articles and cartoons were widely published in newspapers and magazines. Mubarak was an active participant in the peace process, though more often than not he contributed to the hardening of Arab positions toward Israel. He has also refused to visit Israel with the lone exception being to attend the funeral of Prime Minister Yitzhak Rabin.

Israel-Egypt Relations: Background & Overview of Peace Treaty