Monday, April 23, 2012

Egypt cancels Israeli gas contract

Termination of 20-year deal, which provided 40% of Israel's natural gas, seen as sign of fraying relations between allies
Egyptians call for stop to gas exports to Israel in protest outside Israeli embassy in Cairo
Egyptians call on the government to stop exporting gas to Israel in a protest outside the Israeli embassy in Cairo last year. Photograph: Mohamed Abd el-Ghany/Reuters

Egypt has cancelled a 20-year contract to supply Israel with natural gas in a move interpreted as a sign of increasingly fragile relations between the allies.

Both Egyptian and Israeli officials said the reason for the termination of the deal, which was signed in 2005 and provided 40% of Israel's natural gas, was a dispute over payments between private companies. But the governments were trying to prevent it escalating into a political crisis.

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