Hillel Schenker's interview with current head of Egyptian desk at Tel Aviv University's Dayan Center appeared in August/September issue of New Outlook. Below are excerpts from interview. Schenker: Would you give us an evaluation of current state of Israeli-Egyptian relations? Shamir: First of all, we've achieved most important thing we can in any peace relationship: for twelve years now there has been no war between us. And there is a strong commitment on both sides to maintain this situation, a commitment which states that future problems should no longer be resolved by war but rather by negotiations, by diplomatic means. This is major achievement. We have channels of communication. We have embassies in both countries (even if Egyptian ambassador is not in Israel at present). Neither country has problems conveying messages to other side. There is a certain level of interaction between countries which, admittedly, doesn't fulfill all of expectations of Article 3 of peace treaty, which referred to trade, cultural, tourist, and other relations. However, we should appreciate fact that there is Israeli tourism to Egypt and beginnings of Egyptian tourism to Israel; there is strong interaction in area of energy [Israel buys Egyptian oil from Sinai oil wells-ed.]; Israeli ships have access to Suez Canal; there is Israeli Academic Center in Cairo, which does very good work, etc. This, however, doesn't mean that all is well with Egyptian-Israeli peace. I am very disturbed that there are those Israelis who view a crisis in Israeli-Egyptian relations as a peripheral problem which can be placed at bottom of our list of national priorities. This is not case at all. The peace process began as one which was to expand into a comprehensive process. Somewhere along line, this process came to a halt. Actually, until end of last year, process was in a state of constant retreat. Schenker: What were symptoms of this retreat? Shanir: There were a number of points of friction between two sides which were mostly based upon one paramount issue: Palestinian question. In essence, Camp David accord was signed without full agreement on both sides. Immediately after signing of accord, acting on its own interpretation of accord, Begin govemment initiated establishment of a wave of settlements in West Bank, expropriation of land, and an iron fist policy vis-a-vis local populations. The expectations of Egyptians were that in wake of Camp David, there would be progress towards realization of what was written in agreement: a solution which would satisfy the legitimate rights of Palestinians. This is basic gap between two sides. Other Egyptian complaints include problem of annexation of Golan Heights, formal annexation of East Jerusalem, issue of Dayr al-Sultan in Old City, Israeli bombings in Beirut in 1981 and 1982 Lebanon war, problem of Taba, bombing of Iraqi reactor-and all of these things had a very negative impact in Egypt. They only served to nourish opposition to peace treaty. Thus, during past few years, we witnessed an erosion in peace process. And if we allow this to continue unimpeded, it will eventually lead to total collapse of peace agreement. Last year this erosion was halted. What was created was a sense of anticipation that Peres' national unity govemment, together with President Mubarak, would be able to formulate a new program which would bring about a thawing of relations. The