There is no doubt that the dramatic and revolutionary changes that are underway in Egypt will have an impact on the way Egypt handles its relationship with neighboring Gaza and Israel. However, real and far-reaching change will have to wait until things settle down; transformations are still underway and are expected to take time.
The main factor that will lead to these policy changes is the democratization that is expected following the revolution in Egypt. This new factor is highly likely, simply because it is among the leading objectives of the Egyptian revolt and its supporters.
Democratization, in turn, will oblige any future elected parliament and government to pursue policies and positions consistent with Egyptian public opinion. Previously, one of the major "gaps" between the Egyptian public on one hand, and the positions and behavior of the government on the other hand, was Egypt’s relationship with Israel and the Palestinian-Israeli conflict in general. The Israel-Egypt peace treaty signed in 1979 was never popular in Egypt, not because Egyptians are not interested in peace, but because the Egyptian people see the need for a clear link between their relationship with Israel and the way Israel treats Palestinians.
The continuation of the Israeli occupation in the West Bank and Gaza Strip, and its behavior and expressions (including the illegal and unjustified blockade imposed by Israel on Gaza and Israel’s violations of Palestinian rights in the West Bank) have been viewed by Egyptians as aspects that should be taken under consideration in ongoing Israeli-Egyptian relations. The fact that the previous Egyptian government was not properly elected, and therefore did not reflect the sense of the people, enabled it to avoid these requirements in its official policies.
Consequently, in the post-revolution era (and assuming that this revolution will succeed in achieving democracy), Israel will have to exert serious effort to reach out to the Egyptian public and convince it–not only its leaders–that it is worthy of positive relations. Israel should be good at this, actually, given that it has often preached to the Arabs and Palestinians about "selling" the merits of peace.
Perhaps it is this contradiction that best explains Israel’s confused response to the Arab spring uprisings, particularly the revolt in Egypt. On one hand, Israel has typically laid claim to the distinction of being "the only democracy in the Middle East", implying that it encourages democratization in the neighborhood. On the other hand, Israel knows that democratization brings with it challenges for its relationships with Arabs and their governments precisely because of Israel’s ongoing occupation and illegal, inhuman treatment of the Palestinian people, who are at the end of the day part and parcel of the Arab people.
One of the earliest indicators of the change that can be expected in the Israel-Egypt relationship is the active and relatively-successful role Egypt adopted concerning Gaza and the internal Palestinian need for reconciliation. The May 2011 agreement signed by Fateh and Hamas was one of the earliest fruits of these transformations. More recently, the strong Egyptian and Arab support for Turkey’s appeal to international legal organizations concerning its conflict with Israel over the killing of eight Turkish peace activists in 2010 is another sign of change. In addition, we are now frequently witnessing powerful demonstrations in front of the Israeli embassy in Egypt by the Egyptian public opposing violations of Palestinian rights. These are all examples of what Israel has in store for it in the future.