Dina Ezzat and Reem Nafie monitor the swings in official Egyptian and Arab relations with Israel There is no evidence yet that Israeli Prime Minister Ariel Sharon will furnish support for the government of Mahmoud Abbas and Ahmed Qurei as it prepares for Palestinian elections early next year. Sharon, until now, has shown no inclination to desist from ordering military strikes against Palestinian targets. Yet there appears to be some evidence that several Arab capitals, including Cairo, have received assurances from Tel-Aviv and Washington that Sharon will not make things hard for Mahmoud Abbas. In view of assurances characterised by a senior Egyptian official as "fairly credible" Cairo this week engineered a thaw in relations with Israel that have remained chilly since Cairo recalled Egypt's ambassador to Tel-Aviv in September 2000. The signs go beyond this week's release of Israeli spy Azzam Azzam, who has served only half his 15-year jail sentence. Public perception is that Azzam's release was trade-off for the release of six Egyptian students arrested by Israeli authorities last summer for allegedly threatening Israeli security. This week presidential spokesman Maged Abdel-Fattah denied that Azzam's release -- which has outraged many commentators, opposition political parties and swathes of the general public -- was part of a deal. But Egyptian officials insist that Abdel-Fattah meant what he said. "Egypt and Israel are tied by a peace treaty and it is normal for Egypt to have an ambassador in Israel," Abdel- Fattah told reporters earlier this week. Egyptian conditions for the return of an ambassador to Israel have softened considerably in recent months. Cairo had insisted that Israel withdraw to 28 September 2000 lines before any action be contemplated, and had also demanded an end to the siege Israel had imposed on late Palestinian President Yasser Arafat some three years ago. Moreover, Egypt wanted Israel to resume peace and security talks with the Palestinians. With the death of Arafat, the occupation of Iraq and the re-election of the Bush administration, Cairo has rethought its position. Cairo has assurances from Washington, says the same source, that if the Egyptian ambassador returns the US will pressure Sharon to refrain from assassinating the few senior Palestinian figures, including those from Hamas and Jihad, remaining. Though three names have already been touted in connection with the post the final decision on whether or not to send an ambassador is likely to depend on whether or not Israel makes good on promises made in a recent telephone conversation between Sharon and President Hosni Mubarak, as well as during Foreign Minister Ahmed Abul-Gheit and Intelligence chief Omar Suleiman's visit to Israel late last week. Egypt's change of heart, though, is not solely tied to developments on the Palestinian front. Egyptian officials admit Cairo has political and economic interests at stake. Cairo is tired of US nagging, from the administration, Congress and the press, over the issue of Egypt's ambassador to Israel. "If it is not in our [political] interest [any longer] to keep the ambassador away why should we put up with the headache," said one Egyptian official. Cairo is also now convinced that any progress in negotiating a free trade agreement with the US will come via Egyptian agreement to Qualified Industrial Zones (QIZs) -- an arrangement that grants Egyptian exports access to the US market if conducted in cooperation with Israel. Next week, Egyptian and Israeli officials are to meet to fine tune arrangements for a scheme first proposed by Washington in the early 1990s. Jordan is the only other Arab country to have concluded a QIZ arrangement with Israel, and Amman, too, is soon expected to send an ambassador to Tel Aviv. Israeli Foreign Minister Silvan Shalom announced this week that his country was readying itself to initiate diplomatic, economic and cultural relations with up to ten Arab states and Arab diplomats in Cairo acknowledge the potential for such a change. "The Arab Peace Initiative, unanimously adopted by all 22 member states of the Arab League in Beirut 2002, speaks of full normalisation with Israel in return for a comprehensive peace deal with the concerned Arab countries that includes the establishment of a viable and independent Palestinian state, with East Jerusalem as its capital, and a fair legal settlement to the plight of Palestinian refugees in accordance with relevant UN resolutions," commented one Arab diplomat. If Israel is genuinely willing to move in the direction of peace, argues the diplomat, then Arab countries will move in the direction of normalisation. He added that several Arab capitals are receiving messages that with the death of Arafat -- who was snubbed by Sharon and Bush -- Washington is willing to pressure Israel to pick up the Middle East peace file. The government might have what it perceives as sound rationale for the thaw in relations with Israel -- a deal to sell Egyptian natural gas to Israel and increased numbers of tourists are also in the offing, but it might not go over so easily with the public. "What? Send an ambassador? Why? Is it not enough that we gave them Azzam the spy?" said one Cairo taxi driver. "We should send back their ambassador, not send ours." Israel's ambassador to Cairo is planning early retirement. His successor is expected to arrive in Egypt next year with a clear agenda promoting economic and cultural relations. Ways of raising the profile of Egyptian-Israeli relations are also expected to be discussed in Egypt next week when a senior Israeli official, probably Ehud Olmert, Israel's deputy prime minister, arrives in the country.