SHARM EL-SHEIK, Egypt (JTA) — Old warriors-turned-statesmen from Israel and Egypt met Wednesday to head off a diplomatic dispute over the smuggling of weapons into the Hamas-led Gaza Strip.

Two days after Israeli Foreign Minister Tzipi Livni told a Knesset panel that Cairo was doing a “dismal ” job of preventing weapons and cash from reaching Gaza via the Egyptian Sinai, Israeli Defense Minister Ehud Barak flew to Egypt to mend fences.

In the languorous Red Sea resort town of Sharm el-Sheik, Barak and a senior Israeli security entourage held intensive talks with Egyptian President Hosni Mubarak; Mubarak’s intelligence chief, Omar Suleiman, and his defense minister, Hussein Tantawi.

The Israelis were at pains to play down Livni’s remarks and reaffirm the almost 30-year-old peace accord with Egypt, the key Arab power broker on the Palestinian front. Despite ongoing tensions with Egypt, Israeli officials say the Jewish state can ill afford a crisis in relations with its most powerful Arab diplomatic partner.

Barak, who traded tales with Tantawi about their experiences fighting one another as regimental infantry commanders during the 1973 Yom Kippur War, said after the talks, “I come away persuaded that both sides consider the peace a strategic asset. “

“The matter surrounding Tzipi’s remarks is behind us, ” Barak said, though he declined to get into details on what, if any, agreements had been reached with the Egyptians on the arms smuggling. Israel believes Gazan gunrunners have brought tons of weapons and explosives into the Gaza Strip from Egypt since Israel quit Gaza in 2005. The armgs smuggling has intensified since Hamas took control of the strip last June.

On Wednesday, Israel presented Egypt with surveillance footage that Jerusalem said showed Egyptian border policemen actively abetting smugglers. The Egyptians, who have long complained that the 1978 Camp David accord unfairly limits the number of police it can station on the Gaza frontier, were, at least publicly, unmoved.

“Egypt is tackling all the violations which some people might try to carry out on the Egyptian-Palestinian border, ” Egyptian Foreign Minister Ahmed Aboul Gheit said.

Israel has refused Egypt’s suggestions that the Camp David accord be reviewed to allow expansion of the Egyptian garrison along the Gaza border.

“Fighting terror is a matter of pinpoint operations against this or that agent or smuggler, ” a senior Barak aide said. “Egypt has superlative security forces which have ensured that in this country of 72 million people there is no terror. We want the same in Gaza. “

Meanwhile, Gheit accused “the Israeli lobby ” in Washington of pushing Congress to trim some of the $2 billion in annual U.S. aid to Egypt.

Barak denied there was an Israeli government initiative to target Cairo’s coffers, but the exchange with Gheit coincided with a visit to Israel this week by U.S. Sen. Arlen Specter (R-Pa.) and U.S. Rep. Patrick Kennedy (D-R.I.), who voiced support for withholding American aid to Cairo as leverage to get the Egyptians to take concrete actions against the smuggling.

“We do not push anything in the Congress, but of course our relationship is very close and we answer when we are asked questions, ” Barak told Egyptian reporters Wednesday.

Israeli experts say Mubarak is not doing all he can to scuttle Hamas in Gaza because Mubarak wants to avoid angering his most potent rivals in Egypt, the Muslim Brotherhood, which spawned the radical Palestinian Islamist movement.

Some experts say Cairo has a vested interest in perpetuating the low-intensity war between Hamas and Israel in Gaza, because it draws public attention in Egypt away from domestic problems like the dearth of civil rights in the country. This is the charge analysts long have leveled at Arab regimes, saying they use the Israeli-Palestinian conflict to distract their populations from problems at home.

In an apparent bid to deflect Israel’s criticism, Egypt suggested the government of Israeli Prime Minister Ehud Olmert was using the smuggling issue to obfuscate Israel’s crisis of confidence with the Palestinians over Israeli residential construction in the disputed Har Homa neighborhood of Jerusalem.

Israel’s smuggling charges are “a smokescreen to shift attention from settlement construction and the follow-up on Annapolis, ” Mubarak spokesman Suleiman Awwad said.

Palestinian Authority President Mahmoud Abbas has called the Har Homa project a violation of the 2003 “road map ” peace plan and a breach of the joint Israeli-Palestinian statement reached last month at Annapolis, Md., where the two sides pledged to revive bilateral negotiations.

Olmert, who says Jerusalem’s neighborhoods should not be considered part of West Bank land where the Palestinians want a state, is due to meet Abbas on Thursday to sort out the impasse.

Barak shrugged off Awwad’s charge and, in his public comments, made sure to maintain a cordial tone toward his Egyptian hosts. Besides sharing a border with Gaza, Egypt is seen as an important intermediary for efforts to retrieve Cpl. Gilad Shalit, the Israeli soldier abducted by Palestinian gunmen in June 2006.

Hamas is demanding Israel release hundreds of jailed Palestinian terrorists as ransom for Shalit — something Olmert long has ruled out. But the Israeli prime minister signaled some flexibility this week by appointing a Cabinet committee to review the criteria for which Palestinian inmates might be set free in swap.

After the talks in Egypt on Wednesday, a senior Barak aide said there might be a breakthrough on the Shalit issue, though not imminently.

“My sense is that we will have to relax our position, as will Hamas, until we come to some sort of arrangement, ” the aide said.

Published: 12/26/2007