Sitting where I am, a few kilometres from the Egyptian border, and a few yards from Jordan – yes, I’m in Eilat – it’s almost like a geographical paradigm of the pressure, and future potential pressure on Israel.

At the Red Sea Israel comes to a point a few kilometres wide with Egypt to the West and Jordan to the East.

From my hotel balcony I can see these two countries and Saudi Arabia.

Israel is squeezed geographically, politically and psychologically.

The sense of being surrounded was always ameilorated after peace treaties with Egypt and Jordan.

These treaties have always been brittle, but diplomatic relations with Cairo and Amman have led to exchanges of technology, water rights agreements, intelligence exchanges  and even political agreements, for example, to contain Hamas.

It seems that the combination of a lone Tunisian market trader who martyred himself in frustration with his government and the social media has emboldened the famous ‘Arab street’ to revolt against dictators and shout ‘Freedom’. Let us not underestimate the effect of the so-called PaliLeaks in destabilising the region and unleashing a Pandora’s box of troubles.

Egypt is by far the most important country in the region to be affected.

There are three options for Egypt as Mubarak frantically tries to hold on to power:

1. Mubarak holds on to power but introduces some reforms to try to placate the people

2. The country moves to a form of democracy

3. The country moves to an Islamist government, possibly behind Mohammed El Baradei, former head of the International Atomic Energy Agency.

Option 1 will never happen, at least not for long. Once the people find their voice and reject a dictator, that dictator is doomed. We have seen this in Romania with Ceaucescu, we saw it in East Germany. We saw it with the Shah in Iran.

The longer Mubarak tries to hold on, the more violent will the revolt become, the more demonstrators will be killed and more chaos there will be.

The United States and the EU will bring pressure for a resolution of the crisis because of the potential effect on oil prices (already rising).

The US and the EU and world markets will fear the possible closure of the Suez Canal with dire consequences for the region as we saw after the last Egyptian revolution when President Nasser closed the Canal and precipitated a war with Britain, France and Israel.

This fear may lead to the unseemly flight of Mubarak

2. I had a very nice driver whilst I was in Jerusalem last week. Let’s call him ‘N’.

If you have ever been in a Jerusalem taxi you will know that politics soon comes up in any conversation.

N made an interesting point: “The Arabs do not know what ‘democracy’ means”, he said.

You may think this is the jaundiced view of an Israeli living near the Green Line, and a self-confessed right-winger, at that. But N had a point.

Is it possible that the true democrats in Egypt, without a paradigm in the region to imitate, except Israel, can conjure a Western-style democracy out of a popular uprising? Where are the politicians, leaders, intellectuals, journalists who will make the West’s dream come true?

If this dream is realised, how will Arab dictatorships react to such a regime? Will they seek to undermine it? Will they attack it? Will they attack Israel as a ploy to play into Egyptian Islamists hands?

3. Watching CNN here last night, their reporter was out on the street in Cairo and almost all the people he interviewed – and interestingly, they all seemed to be women – claimed they wanted freedom and condemned Mubarak. Why? Because, they said, Mubarak was working with Israel.

Yes, that’s right, freedom for these people appears to be the freedom to break the treaty with Israel, open the Rafah crossing, join up with Hamas and Hizbollah and even more concerningly, Iran, and attack Israel.

How quickly will Jordan, Tunisia and others follow suit if Egpyt falls to the Brotherhood.

Here’s a fourth scenario: civil war between Islamists and pro-democracy supporters.

It seems that, regardless of the result, the US and Israel will be identified with the Mubarak regime and the ‘cold peace’ with Israel will be threatened.

I would have a strong sense of schadenfreude if it were not for the fact that Israel will lose out whatever happens.

This would-be schadenfreude is caused by the obsession of the world media,the EU and the UN with Israel and its relations with the Palestinians. So focused are they in vilifying and delegitimising Israel with a viciousness reserved for no other country, so keen have they been to see militant Islam as a reaction to Israel’s ‘oppression’ of Palestinians, so keen have they been to minimise the Islamist threat in the region, that they have been taken unawares by this new potential twist in the Middle East story.

Maybe now they will see that Israel really is a beacon of democracy and freedom and essential to the interests of the West.

I had a little chuckle when Iran gave its support to the people of Egypt in their struggle for democracy against an oppressive regime.

Iranians, apparently, do not do irony.