Carter also wasted no time in visiting the heads-of-state on whom he would have to rely to make any peace agreement feasible. By the end of his first year in office, he had already met with Anwar El Sadat of Egypt, King Hussein of Jordan, Hafez al-Assad of Syria, and Yitzhak Rabin of Israel. However, the United States still feared some action by Hungary, East Germany, Romania, Yugoslavia, Czechoslovakia, Bulgaria, Albania, and the Soviet Union who had fought on the Egyptian and Syrian side. These were also the members of the Warsaw Pact. As a precaution, the NATO armies were mobilized for war. Carter's and Vance's exploratory meetings gave him a basic plan for reinvigorating the peace process based on the Geneva Conference and Israeli withdrawal on all fronts, including the West Bank. The political situation in Israel underwent a dramatic upheaval with a devastating electoral loss of the long-ruling Alignment (the forerunner of the Israeli Labour Party) to Menachem Begin's Likud in May 1977. While Begin officially favored the reconvention of the conference, perhaps even more vocally than Rabin, and even accepted the Palestinian presence, in actuality the Israelis and the Egyptians were secretly formulating a framework for bilateral talks. Even earlier, Begin had not been opposed to returning the Sinai, but a major future obstacle was his firm refusal to consider relinquishing control over the West Bank.
President Anwar El Sadat came to feel that the Geneva track peace process was more show than substance, and was not progressing, partly due to disagreements with Syria and his communist allies. He also lacked confidence in the United States to pressure Israel after a meeting with Carter. His frustration boiled over, and after clandestine preparatory meetings between Egyptian and Israeli officials, unknown even to the Americans, in November 1977 Anwar El Sadat became the first Arab leader to visit Israel, thereby implicitly recognizing Israel.
The Sadat visit came about after he delivered a speech in Egypt stating that he would travel anywhere, "even Jerusalem," to discuss peace. That speech led the Begin government to declare that, if Israel thought that Sadat would accept an invitation, Israel would invite him.
In Sadat's Knesset speech he talked about his views on peace, the status of Israel's occupied territories, and the Palestinian refugee problem. This tactic went against the intentions of both the United States and the Soviet Union, which were to revive the Geneva Conference. Hungarian leader Janos Kadar threatened war with Egypt if they signed a peace agreement with Israel. Czechoslovakia, Bulgaria, and Albania followed. Yugoslavia and East Germany also threatened to attack Egypt if they did not revoke their recognition of Israel. The Soviet Union, Poland and Romania didn't threaten war, but they would support their allies in a war against Egypt.
The gesture stemmed from an eagerness to enlist the help of the United States in improving the ailing Egyptian economy, a belief that Egypt should begin to focus more on its own interests than on the interests of the Arab world, and a hope that an agreement with Israel would catalyze similar agreements between Israel and her other Arab neighbors and help solve the Palestinian problem. Prime Minister Begin's response to Sadat's initiative, though not what Sadat or Carter had hoped, demonstrated a willingness to engage the Egyptian leader. Like Sadat, Begin also saw many reasons why bilateral talks would be in his country's best interests. It would afford Israel the opportunity to negotiate only with Egypt instead of with a larger Arab delegation that might try to use its size to make unwelcome or unacceptable demands. Israel felt Egypt could help protect Israel from other Arabs and Eastern communists. In addition, the commencement of direct negotiations between leaders – summit diplomacy – would distinguish Egypt from her Arab neighbors. The basic message of Sadat's speech at the Knesset were the request for the implementation of Resolutions 242 and 338. Sadat’s visit was the first step to negotiations such as the preliminary Cairo Conference in December 1977 and ultimately the Camp David Accords.
Accompanied by their capable negotiating teams and with their respective interests in mind, both leaders converged on Camp David for thirteen days of tense and dramatic negotiations from September 5-17, 1978. By all accounts, Carter's relentless drive to achieve peace and his reluctance to allow the two men to leave without reaching an agreement are what played the decisive role in the success of the talks. Numerous times both the Egyptian and Israeli leaders wanted to scrap negotiations, only to be lured back into the process by personal appeals from Carter. Begin and Sadat had such mutual antipathy toward one another that they only seldom had direct contact; thus Carter had to conduct his own microcosmic form of shuttle diplomacy by holding one-on-one meetings with either Sadat or Begin in one cabin, then returning to the cabin of the third party to relay the substance of his discussions.
A particularly difficult situation arose on the tenth stalemated day of the talks. The issues of Israeli settlement withdrawal from the Sinai and the status of the West Bank created what seemed to be an impasse. Begin and Sadat were “literally not on speaking terms,” and “claustrophobia was setting in." In response, Carter had the choice of trying to salvage the agreement by conceding the issue of the West Bank to Begin, while advocating Sadat’s less controversial position on the removal of all settlements from the Sinai Peninsula. Or he could have refused to continue the talks, reported the reasons for their failure, and allowed Begin to bear the brunt of the blame. Carter chose to continue and for three more days negotiated.
The first agreement had three parts. The first part was a framework for negotiations to establish an autonomy self-governing authority in the West Bank and the Gaza strip and to fully implement SC 242. It was less clear than the agreements concerning the Sinai, and was later interpreted differently by Israel, Egypt, and the United States. The fate of Jerusalem was deliberately excluded from this agreement.
The second part dealt with Egyptian-Israeli relations, the real content being in the second agreement. The third part "Associated Principles" declared principles that should apply to relations between Israel and all of its Arab neighbors.
The second agreement outlined a basis for the peace treaty six months later, in particular deciding the future of the Sinai peninsula. Israel agreed to withdraw its armed forces from the Sinai, evacuate its 4,500 civilian inhabitants, and restore it to Egypt in return for normal diplomatic relations with Egypt, guarantees of freedom of passage through the Suez Canal and other nearby waterways (such as the Straits of Tiran), and a restriction on the forces Egypt could place on the Sinai peninsula, especially within 20-40 km from Israel. Israel also agreed to limit its forces a smaller distance (3 km) from the Egyptian border, and to guarantee free passage between Egypt and Jordan. With the withdrawal, Israel also lost the Abu-Rudeis oil fields in western Sinai, which contained Israel's only long term commercially productive wells to date.
The agreement also resulted in the United States committing to several billion dollars worth of annual subsidies to the governments of both Israel and Egypt, subsidies which continue to this day, and are given as a mixture of grants and aid packages committed to purchasing U.S. materiel. From 1979 (the year of the peace agreement) to 1997, Egypt received $1.3 billion annually, which also helped modernize the Egyptian military, turning it into the largest in the Middle East. Soviet-supplied until 1979, Egypt now received American weaponry such as the M1A1 Abrams Tank, AH-64 Apache gunship and the F-16 fighter jet. In comparison, Israel has received $3 billion annually since 1985 in grants and military aid packages.
"The normalization of relations [between Israel and Egypt] went into effect in January 1980. Ambassadors were exchanged in February. The boycott laws were repealed by Egypt's National Assembly the same month, and some trade began to develop, albeit less than Israel had hoped for. In March 1980 regular airline flights were inaugurated. Egypt also began supplying Israel with crude oil.
The time that has elapsed since the Camp David Accords has left no doubt as to their enormous ramifications on Middle Eastern politics. Most notably, the perception of Egypt within the Arab world changed. With the most powerful of the Arab militaries and a history of leadership in the Arab world under Nasser, Egypt had more leverage than any of the other Arab states to advance Arab interests. One key point of criticism was at concluding a peace treaty without demanding greater concessions for Israeli recognition of the Palestinians' right to self-determination. Egypt was also suspended from the Arab League from 1979 until 1989.
The Camp David Accords also prompted the disintegration of a united Arab front in opposition to Israel. Egypt's realignment created a power vacuum that Saddam Hussein of Iraq, at one time only a secondary power, hoped to fill. Because of the vague language concerning the implementation of Resolution 242, the Palestinian problem became the primary issue in the Arab-Israeli conflict immediately following the Camp David Accords (and arguably, until today). Many of the Arab nations blamed Egypt for not putting enough pressure on Israel to deal with the Palestinian problem in a way that would be satisfactory to them.
Lastly, the biggest consequence of all may be in the psychology of the participants of the Arab-Israeli conflict. The success of Begin, Sadat, and Carter at Camp David demonstrated to other Arab states and entities that negotiations with Israel were possible — that progress results only from sustained efforts at communication and cooperation. Despite the disappointing conclusion of the 1993 Oslo Accords between the PLO and Israel, and even though the 1994 Israel-Jordan Treaty of Peace has not fully normalized relations with Israel, both of these significant developments had little chance of occurring without the precedent set by Camp David.
For Israel, perhaps the most evident tangible benefit of the agreement with Egypt (other than the subsequent U.S. aid, which Egypt also received) was a peaceful mutual border, enabling the Israel Defense Forces to reduce their levels of alert on Israel's southwestern frontier. Although both sides generally abided by the agreements since 1978, in the following years a common belief emerged in Israel that the peace with Egypt is a "cold peace." There are Israelis who feel that Egypt is adhering only to letter and not the spirit of the agreement, particularly with the clauses concerning normalization of relations between the two countries. Others feel that the Peace agreement was between the Israeli people and Egypt's charismatic President Anwar El Sadat, rather than with the Egyptian people, who were not given the opportunity to accept or reject the agreement with a free vote or a representative majority. However, it was initially supported by the vast majority. While the treaty was approved by a parliament majority in Israel, which has a multi-candidate, Multi-party electoral system, Egypt has had a semi-presidential system with a single candidate government since 1953.
Further supporting this claim is the fact that although Israeli tourists flocked to Egypt, few Egyptians return the gesture: in the peak year, 1999, 415,000 Israelis visited Egypt. The highest number of Egyptians visiting Israel was 28,000, in 1995. (While the disparity is undoubtedly attributable in part to Egyptian average income being lower, it is also worth noting that Israel's population is 6 million while Egypt's is 71 million). Approximately 1.8 million Egyptians travel abroad every year, while in 2006 2 million Israelis traveled abroad, indicating that a significantly higher percentage of Israeli travelers visit Egypt than the percentage of Egyptian travelers who visit Israel.
According to the BBC, New York Times, the Middle East Media Research Institute, Anti-Defamation League, and former Israeli diplomat to Egypt Ephraim Dowek, anti-Semitic themes and cartoons still appear in the Egyptian media. These themes include Holocaust denial, accusations that Jews committed the 9/11 terrorist attacks, imagery of Jews as Satanic figures, equating Jews with Nazis, imagery of Jews with hooked noses, and resurfacing the blood libel against Jews. Abdullah Schliefer, director of Television Studies at American University of Cairo, explains that "it's not real racial anti-Semitism," but rather "just a stupid knee-jerk reaction to the Arab-Israeli conflict."
Egypt has mediated several unofficial cease fire understandings between Israel and the Palestinians. There have been many popular protests in Egypt against peace with Israel (from all levels of society, up to and including intellectuals, students and democratization movements such as Kifaya). These typically intensify following Israeli actions in its conflicts with the Palestinians and Lebanon, which Israel views as self defence, but are seen in Egypt as harsh repression of Arabs.
According to an Egyptian Government 2006 poll of 1000 Egyptians (taken at the time of the 2006 Israel-Lebanon conflict) 92% of Egyptians view Israel as an enemy nation. However, the treaty was supported by the vast majority of Egyptians on the day it was signed. In Israel, there is lasting support of the Camp David Peace Accords, which have become a national consensus, supported by 85% of Israelis according to a 2001 poll taken by the Jaffee Center for Strategic Studies (Israel based). Nevertheless, a minority of Israelis believe the price Israel paid for the peace agreement was too high for its present gains, i.e. having relinquished the entire Sinai Peninsula, with its oil, tourism and land resources (Israel has no other oil wells), and the trauma of evacuating thousands of its Israeli inhabitants (many resisted, as in the town of Yamit and had to be forcefully evacuated, a phenomenon encountered also in the subsequent Israeli withdrawal from Gaza in 2005, known as the Disengagement).