Israel official 'concerned' over future ties with Egypt
* Defence aide breaks with official Israeli optimism
* U.S. keeps up aid payouts to Cairo
By Dan Williams
JERUSALEM, April 3 (Reuters) - A senior Israeli official said on Tuesday he was concerned about the commitment of Egypt's Muslim Brotherhood, which dominates parliament and now seeks the presidency, to a 33-year-old peace treaty with Israel.
The remarks by Amos Gilad, a top aide to Defence Minister Ehud Barak, parted with Israel's public stance of cautious optimism over future relations with Cairo since U.S.-aligned President Hosni Mubarak was toppled last year.
"I'm not hiding from you that we are concerned," Gilad told foreign journalists and diplomats in a briefing. "The leaders of the Muslim Brotherhood keep declaring, 'We are committed to this peace.' I am not so sure."
Egypt's interim military rulers have repeatedly pledged to honour international obligations including the 1979 peace pact, which marked the first Arab recognition of the Jewish state.
In a speech later on Tuesday, Prime Minister Benjamin Netanyahu said Israel faced tougher relations with Cairo, but hoped that Egypt would maintain the peace treaty.
"The Muslim Brothers will not show mercy to us, they will not give way to us, but I hope they will keep the peace in Egypt, I hope that every government there will keep the peace (agreement)," Netanyahu said.
"It is important for us, but I think that it is also important for Egypt," he added.
The Brotherhood, whose Freedom and Justice Party controls the biggest bloc in parliament has regularly censured Israel for the way it deals with Palestinians - especially in the Gaza Strip, which is governed by kindred Hamas Islamists but it has echoed the interim military rulers' line on keeping the treaty.
Underscoring the Brotherhood's ideological parallels with Hamas, which rejects permanent coexistence with Israel, Gilad said the group "have a dream to establish an Islamic empire at the expense of Egypt. Israel is excluded, anyway."
Gilad, a veteran liaison with Egypt, said the Islamists regard Israel as "Waqf, holy land" which also has the humbler connotation of land or property bequeathed by Muslims for religious purposes.
After initially saying it would not field a candidate in Egypt's presidential election in May, the Brotherhood announced on Saturday that its deputy leader, Khairat al-Shater, would run.
Shater, a millionaire businessman jailed repeatedly under Mubarak, has held contacts with U.S. officials and met the International Monetary Fund team negotiating a $3.2 billion loan facility with the government.
Last month, the Obama administration released $1.3 billion in U.S. military aid for Egypt, the same level it has received for years, despite Cairo's failure to meet pro-democracy goals.
U.S. AID KEY
Israeli officials have sought to link continued American funding to Cairo with its keeping the peace, especially in the Egyptian Sinai desert, which is largely demilitarised under the 1979 accord and has seen a surge of Islamic militancy and gun-running to neighbouring Gaza.
Asked about Shater's candidacy on Sunday, Israeli Vice Prime Minister Moshe Yaalon voiced confidence, during a radio interview, that "Egypt understands the tight relationship between its commitment to the peace agreement with us and the continuance of (Egypt's) relations with the United States - mainly with the American aid".
But Gilad, who briefed the Jerusalem Center for Public Affairs, a conservative Israeli think-tank, was less certain. He cited the demand by an Egyptian parliamentary panel last month to expel the Israeli ambassador and review ties with the Jewish state after it launched military strikes on Gaza.
Gilad said "all these developments, we will need to look at them very carefully. Because they can declare they are committed to peace but they can find excuses to undermine it."
The Gaza flare-up, during which 25 Palestinians were killed, was triggered by a March 9 air strike by Israel on militant chiefs it accused of planning to attack it via the Sinai.
Armed infiltrators killed eight Israelis on the Egyptian frontier in August. Israel's forces, repelling the gunmen, killed five Egyptian border troops, prompting protesters in Cairo to storm the Israeli embassy. (Writing by Dan Williams; Editing by Alessandra Rizzo)
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