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Egypt halts gas shipments to Israel in contract dispute

April 23, 2012 |  5:52 am

JERUSALEM -- Egyptian officials said they are suspending natural gas shipments to Israel due a contract dispute arising from the two countries' controversial multibillion-dollar supply agreement.

The move announced Sunday is the latest sign of souring relations between the Camp David peace treaty partners. Egypt accuses Israel of failing to make payments on gas deliveries in recent months. Israel denies the claim.

Shipments have been interrupted more than dozen times over the last year due to sabotage attacks and explosions along the pipeline through the Sinai Peninsula.

The deal, signed in 2005, is viewed in Egypt as a symbol of the corruption of the previous regime. Political and religious figures have called for its termination ever since former President Hosni Mubarak was toppled last year.

Critics claimed that Mubarak gave Israel below-market rates for the gas, which at one point covered about 40% of Israel's needs.

Over the last year, Israel has scrambled to offset declining deliveries from Egypt by increasing its domestic production, but energy officials warn that a complete termination of supplies from Egypt may lead to power disruptions this summer.

Israeli and Egyptian officials stressed that the dispute is purely commercial and will not affect diplomatic relations. But others view the conflict as a further distancing between the two countries, which could affect their 1979 peace accord.

Israeli opposition leader Shaul Mofaz told Israeli media Sunday that Egypt's decision marked "a new low in the relations between the countries and a clear violation of the peace treaty."

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-- Edmund Sanders

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