As the US secretary of state, Hillary Clinton, and the UN secretary general, Ban Ki-moon, flew into Cairo on Wednesday to help seal the deal that would bring an end to a week of conflict in Gaza, a plume of smoke was visible from the Kasr an-Nile bridge.

Half an hour earlier, a group of several hundred demonstrators had torched a studio used by al-Jazeera television. That event, on the third day of clashes with police, underlined the contradictions of Egypt under President Mohamed Morsi, even as he emerged as an important new player on the international stage.

For while Morsi has skilfully negotiated the first major foreign policy crisis since the fall of Hosni Mubarak’s regime, that success masks a host of challenges ahead for him.

In the immediate aftermath of the truce announcement on Wednesday, Morsi was lauded by Clinton. “I want to thank President Morsi for his personal leadership to de-escalate the situation in Gaza and end the violence,” she said. “This is a critical moment for the region. Egypt’s new government is assuming the responsibility and leadership that has long made this country a cornerstone of regional stability and peace.”

Over the past few days Morsi has met with Turkey’s prime minister and the emir of Qatar, and hosted Germany’s foreign minister and Arab officials. An Israeli envoy flew secretly into Cairo for talks with Egyptian security officials, though Morsi did not meet or speak directly with any Israelis.

In the end the truce, and his role in it, was an extraordinary achievement. The question, however, is whether Morsi, the Muslim Brotherhood and Egypt may come to regret their key role.

For while the deal has established Egypt as a key regional leader in the region with Turkey and Qatar – all US allies – the truce negotiated by Morsi and his spy chief, Mohamed Shehata, also inserts Egypt as guarantor of Gaza and Hamas.

The irony is that asking Egypt to take greater responsibility for Gaza, which it administered until 1967, is precisely what some Israeli politicians have long desired: to hive off the problem of Gaza to Cairo, which would further stifle any possibility of a two-state solution.

Indeed, Morsi may find the truce easier to negotiate than what follows: his predecessor, Mubarak, chose to co-operate with Israel in maintaining the blockade of Gaza because of his enmity to Hamas, which emerged out of the Muslim Brotherhood. Morsi, however, may find his difficulties reside in his movement’s closeness to Hamas.

Facing pressure from within Egypt and from Hamas to open the borders, he may, however, be deeply cautious of doing anything unilaterally that might underline the broader objectives of securing a Palestinian state.

Indeed, as Michael Wahid Hanna of the Century Foundation told Time magazine in the immediate aftermath of the ceasefire: “If Egypt opened the Rafah border crossing without Israel doing the same at its own crossings into Gaza, there’d be champagne corks popping in Tel Aviv and Jerusalem. They won’t do that, because Egypt won’t shoulder the burden of Gaza, which could end the possibility of a unified Palestinian state.”

On the Gaza front the deal may present other immediate problems. In the ceasefire negotiations Israel pushed hard for firmer Egyptian action on arms smuggling to Gaza through the northern Sinai, an increasingly lawless region where armed attacks on security forces by Salafists are so commonplace that on some roads the army abandons its checkpoints at night.

The problems in the Sinai are not, as a recent International Crisis Group report made clear, simply a security problem, but also a complex political and economic one, which Egypt’s new government has barely grappled with.

“Egypt has huge problems of its own,” said one diplomat last week. “It needs stability and it needed the prospect of war to recede. There is a question too of its military capacity to deal with issues like Sinai.”

Therein lies the problem. Critics allege that while Morsi has taken a high profile on the international stage he and his government have been far less successful in tackling his country’s myriad economic, social and political problems.

On the economic front, Egypt’s deal with the IMF for a $4.8bn (£3bn) loan, announced on Tuesday, obliges it to end subsidies on items such as fuel, which will lead, inevitably, to unpopular price rises at a time of growing hardship.

Tourism, while slowly improving after the huge hit it took during the Arab spring, is far below pre-revolution levels. Unemployment remains high as does inflation – a dangerous combination – while crime has become a serious issue.

The failure to prosecute members of the security forces who committed crimes, including killings, during the revolution and after remains a running sore in Egyptian society.

In the past week Egypt was hit by small-scale confrontations between army and police, another worrying symptom. And almost unnoticed amid the intense focus on Gaza, a stream of groups – including liberals, Christian Copts, journalists and women’s rights campaigners – have withdrawn from Egypt’s constitutional assembly, which is supposed to draw up the country’s new constitution, alleging that ultra-conservatives have taken over the process.

Given all these simmering tensions, Gaza and the truce matters in terms of Egypt’s domestic politics because it is an issue on which most Egyptians, from secular liberals to Islamist, agree. Should the truce agreement backfire badly it would have profound implications not only for Morsi and the Muslim Brotherhood but for Israel: any alternative Egyptian government would likely be hostile to the deal.

“Morsi’s popularity can’t go on eroding like this for ever,” rights activist Mohsen Kamal told Reuters. “He is vulnerable to dramatic, and maybe even violent, changes if he ignores what is happening.”

Source: Guardian News