The Israel-Egypt peace agreement was a watershed event and marked the first such agreement between the Jewish state and an Arab state. The breakthrough came in November 1977 when Egyptian President Anwar Sadat made a bold and unprecedented visit to Israel, and in a speech at the Israeli Knesset (parliament) addressed the Israeli people with words of reconciliation and peace.
Formal negotiations ensued the following September when Sadat and Israeli Prime Minister Menachem Begin joined U.S. President Jimmy Carter at the Camp David presidential retreat in Maryland. The so-called "Camp David Accords" of September 17, 1978 were based on U.N. resolutions 242 and 338, and were meant to constitute a basis for peace not only between Egypt and Israel, but also to reach "a just, comprehensive, and durable settlement of the Middle East conflict" for all neighbors willing to negotiate with Israel. Israel agreed to withdraw from all of the Sinai within three years and to dismantle its air bases near the Gulf of Aqaba and the town of Yamit; Egypt promised full diplomatic relations with Israel, and to allow Israel passage through the Suez Canal, the Straits of Tiran, and the Gulf of Aqaba. The accords also stipulated a framework for solving the problem of the West Bank and Gaza.
On March 26, 1979, the two countries signed a peace treaty on the White House lawn. Sadat, having gone out on a limb for the peace treaty, was vilified in the Arab world, and was assassinated in 1981.
The groundbreaking Israel-Egypt peace paved the way for subsequent Israeli negotiations and treaties with Jordan and the Palestinians. Relations between Cairo and Jerusalem have not been warm, and the two nations share what is commonly referred to as a "cold peace." However, in recent years, Egypt has played a key behind-the-scenes role in facilitating Israeli-Palestinian negotiations and helping prepare the Palestinian Authority for the Israeli disengagement from Gaza. In December 2004, Israel, Egypt and the U.S. signed a joint free trade agreement.