On November 19, 1977, Egyptian President Anwar Sadat visited Jerusalem and spoke at the Israeli parliament, the Knesset, emphasizing the need for Israeli peace with Egypt and the Palestinians (i.e., through the creation of a Palestinian state). On September 17, 1978, a peace treaty was signed between Israel and Egypt at Camp David, in the United States. Known as the Camp David Accords, the treaty states that "[T]he parties are determined to reach a just, comprehensive, and durable settlement of the Middle East conflict through the conclusion of peace treaties based on Security Council resolutions 242 and 338 in all their parts." It is interesting to note that the Accords assume from the outset that Israel will eventually sign peace treaties with Jordan and the Palestinians and thus involve the latter two sides in future negotiations. For example, negotiations regarding the establishment of a self-governing administrative council in the West Bank and Gaza are to be conducted "among Egypt, Israel, Jordan, and the elected representatives of the inhabitants of the West Bank and Gaza [i.e., the Palestinians]."

In January of 1980, Israel and Egypt formally established diplomatic relations. Some Egyptians were greatly upset by this change in Egypt’s political direction, notably members of the then-unknown Organisation of Liberation of Egypt. On October 6, 1981, three Egyptian soldiers assassinated Sadat; the Organisation claimed responsibility. A week later, Hosni Mubarak became president of Egypt, vowing to continue Sadat’s policies. A year later, in accordance with the Camp David Accords, Israel withdrew from the entire Sinai Peninsula, with the exception of Taba, next to the Israeli resort city of Eilat. Finally, in 1989, Israel withdrew from Taba. The Hilton Hotel, which had been built in Israeli Taba, remained in use in Egyptian Taba until 2004. After Egypt regained Taba, a casino was added to the Hilton. The casino was managed by Inter-Casino, a British casino chain, but was staffed entirely by Egyptians. Most of the casino’s patrons came through Israel, oftentimes spending only a few hours at the casino before returning over the border to Eilat. This practice was facilitated by the fact that people who crossed from Israel into Egypt but planned to only visit Taba before returning to Israel paid no border fees of any kind. This, coupled with the fact that the Taba Hilton was walking distance from the border meant that the patrons of the Taba Casino treated it as a de facto part of Eilat. On October 7, 2004, terrorists, using a car bomb, blew up the Taba Hilton and its casino. Soon after the attack, Israel managed to secure Egyptian permission to send Israeli soldiers and rescue crews to Taba. Together, Israeli and Egyptian teams recovered the bodies of the deceased and rescued the survivors.

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