The major upheaval in Israel’s local sphere has been the conciliation and bargaining between Fatah and Hamas, but this has nothing to do with the undercurrents of the revolts in the area, though it was brokered by the new Egyptian government. More to their consternation is the opening of the Gaza border with Egypt and the down -gradable security situation this delivers to the South. This is a direct outcome of the revolt in Egypt as the Mubarak regime would not have dared to open the border, as it was desperate to keep out extreme elements from infiltrating Egyptian society and the Sinai. Though even this can be seen as a good break for the Israelis as it now allows them to counter any arguments that, they are causing a humanitarian crisis within Gaza (one that never was), all the focus and dependence upon keeping Gaza running can now be passed to the Egyptians. The worry with weapons coming in is moot, as anything would have been smuggled through the tunnels anyway, so for the Israeli government this is a win-win situation(if they are willing to see it), once they open their eyes and the eyes of the West to the new reality. For years they had been trying to get Egypt to take responsibility for the Gaza and Jordan of the West bank, now one of these puzzles is slowly occurring, a few more moves and the Israelis can wipe their hands of Gaza for good, as anything other than a security problem.
The Egyptian population is becoming more and more powerful in its demands to break the treaty with Israel, but to those in power the treaty is too important, they know they would never win an armed conflict, they know they need the money the US sends to them each year, and an increasingly extreme population slowly kills their tourist industry and any possibility for economic investment. So soon without the IMF bailout they are going to be facing up to a starving population, and then there will be no escape from those realities with an external adventure.
The situation with their border with Syria (we can add Lebanon too as Hezbollah run the border there) is far more fluid and combustible, as the regime in Damascus has threatened unstable borders with Israel and this was seen by them organising the nabka riots on the Israeli border. Nothing like that occurs without approval from the highest ranks in Damascus. If the Syrian regime survives intact then the consequences for Israel could be dire for its North, where it will look to destabilise the area foisted upon their population leading to a permanent sense of war against Israel. Or else it could be so weakened that it might end up isolated and an easy target for reprisal to border conflagrations. The same goes with Hezbollah in Lebanon, Iran is the major factor here, how much influence will it lose with the changes that are going on, and what is it willing to put on the line. At the moment Iran is in the midst of an internal governmental Putsch against Ahmadinejad who is trying to hold his power bases against the might of the Ayatollahs, so again all is fluid.
If the Syrian regime falls, it will leave a country with no real power brokers and near anarchy, this would mean all their aggression and focus will be on internal issues, leaving the Israeli issue a non-starter, as Syria is about to go bust, has no foreign reserves with which to buy food to feed its population, it will be years and years before they come to a situation to have any influence on Israeli politics, apart from being unable to stop infiltration attempts across the border. But against this Israel will be able to deal, as it has for some time now along the Lebanese border.
So the revolts in the various Arab countries around Israel has left it in a stronger and more hegemonic position than it has been for some time, though the likelihood of minor seismic instability along borders is still present, it isn't on the scale it has been in the past, and will likely never be so in the future. Israel has a thriving economy, a growing population, all the indicators show growth and prosperity, the Arab neighbours on the other hand are in a vast downward spiral, the wealth they were gifted in oil will soon be of secondary importance to the modern world, and internal contradictions will be their fight for the future.
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