"It's hard to believe the Egyptians will overcome the ever-deepening polarization between the Islamist Egypt and the secular Egypt," an Israeli state official estimated Wednesday.
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"Ultimately, they will have no choice but to find an agreed-upon framework for cooperation but until they do, we might see violent clashes," he added.
On Wednesday, former Defense Minister Binyamin Ben-Eliezer remarked that "The Muslim Brotherhood's bizarre regime is over and done with. If a secular candidate wins it will have a huge impact on the entire Middle East."
State officials describe the current situation in Cairo as a nerve-wracking game of poker. "On the one hand, Morsi doesn't want to resign; on the other, the army doesn't want to take full responsibility. Egyptians are starting to realize that Islam is not the answer. It provides them with no solution to the economic situation," one state official said.
He noted that Israel enjoyed good security cooperation with Egypt under Morsi's leadership. "It's not about us, we're monitoring the situation from the sidelines."
The Prime Minister's bureau has ordered the cabinet not to publically discuss Egypt.
Government officials denied reports that Israel has allowed the Egyptian army to deploy reinforcements in the Sinai Peninsula.
However, the past few days have seen increased military activity in the border area with Egyptians trying to seal smuggling tunnels between Gaza and Egypt. The Egyptian army is hoping to prevent the movement of Hamas militants from the Strip to Egypt and thwart the smuggling of weapons into the country.
State officials have admitted that growing instability in Egypt would make it harder for the Egyptians to maintain their control in Sinai. The main concern is that Jihadists will use the vacuum to try to carry out terrorist attacks against Israel or the Egyptian army.
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