It’s been 26 years since Israel and Egypt signed a peace treaty that has been notable most of all for the coldness of the peace that it brought. But as Israel and the Palestinians attempt to restart the peace process, Egypt is again playing a crucial role.

To listen to Nabil Fahmy, Egypt’s ambassador to the United States, that’s only natural. He’s been involved in the last 25 years of diplomacy and believes it is imperative that the parties, with the help of the United States, keep at it.

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Having recently had the opportunity to sit down and talk with Fahmy, I couldn’t help but be impressed with him. The ambassador was born in New York and speaks fluent English with a distinct American accent. He is articulate, smart and understands exactly how to speak to Americans, particularly Jewish audiences.

Listening to his soft-spoken and reasonable analysis of the situation, it’s hard not to believe that peace is possible. He is quick to acknowledge the frustrations felt by Israelis and Jews about the cold peace, but says Egyptians are frustrated, too. Just as Israel wanted normal relations and a warm peace, “Egyptians wanted a complete peace” that would involve the Palestinians and other Arab nations, he says.

“There are unfulfilled expectations on both sides,” says Fahmy. But despite the drawbacks of the status quo, Fahmy is right when he says it “is better than the alternative.”

And in order for Israelis and Palestinians to come to terms with each other, he believes both sides must give as well as get. “I believe most Palestinians and Israelis support a two-state solution and a peace process,” he asserts.

The formula, as he sees it, is clear. The Palestinians must see a sovereign state as a reachable goal and “the Israelis must understand that this [the negotiating process] is not one stage in a continuing conflict. Israel can’t be allowed to think that peace only postpones the [next round] of the conflict.”

That’s a telling point and it is exactly on that issue that Egypt has a key role to play in either reinforcing the momentum for peace or derailing it. For all of the recent optimism, there are ominous clouds on the horizon. Israeli military officials have been signaling that they see the current truce being used by the Palestinians as an opportunity to rearm and reload before starting the next intifada campaign of terror.

Of particular concern has been the wholesale smuggling of arms into Gaza from Egypt via tunnels that run under the so-called Philadelphia corridor that defines the border. Once Israel pulls out of Gaza, they fear that a new Palestinian offensive will start in an attempt to duplicate what they believe to be their success in pushing the Israelis out of Gaza.

The question is, is big brother Egypt guiding the Palestinians toward peace or is it helping to let things slide back into chaos? According to Fahmy, Egypt is committed to stopping the smuggling even though he contends the problem is “exaggerated.” And to back up that assertion, the Egyptians are currently negotiating an agreement with Israel that will call for them to police the border so Israel can safely pull out.

At the same time, rather than disband the Hamas and Islamic Jihad terror groups, not to mention his own Al Aksa Martyrs Brigade, Palestinian President Mahmoud Abbas is trying to co-opt them. Egypt has played a key role in that story as well, hosting conferences between the Palestinian factions. And even though the stated goal is a cease-fire, the result has been a legitimization of the terrorists.

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Jonathan S. Tobin is editor in chief of JNS. He can be followed on Twitter, @jonathans_tobin.