The street protests that have apparently ended the 30-year reign of Egyptian President Hosni Mubarak and threaten to spill across the Arab world pose a dangerous new wild card for the Obama administration — and point to another potential source of friction with Israel.

President Barack Obama’s dramatic shift in recent days from outright support for Mubarak to urging him not to seek re-election this fall alarmed Israeli leaders and analysts, who have seen Mubarak as a linchpin of regional stability and the guarantor of the 1979 Israeli-Egyptian peace treaty. On Tuesday the aging Egyptian leader announced he would, in fact, not seek re-election, although what happens next in Egyptian politics is far from clear.

For the administration the shift away from Mubarak in the face of popular protests over corruption and the repression of dissent may have been seen as the only way to retain U.S. credibility with the Egyptian people and throughout the region and to keep a bad situation from getting worse — potentially much worse.

“Israel’s leaders may live in a bubble, but U.S. governments cannot afford to,” said Daniel Levy, director of the Prospects for Peace initiative of the Century Foundation. “With the rest of the world watching an attempted democratic revolution against a dictator, what else could — or should — a U.S. president do?”

Israel’s quiet support for Mubarak, Levy said, could put the Jewish state on the wrong side of a tectonic political shift across the region — one that seems to echo traditional U.S. demands for more freedom and democracy.

Some of Israel’s supporters counter with the argument that the devil Israel knows — the autocratic, repressive Mubarak — is better than the devil it doesn’t, which could include the ascent to power of the Muslim Brotherhood. That would expand the encirclement of Israel by radical Islamic forces and potentially threaten the 32-year-old peace with Egypt.

Jewish leaders here acknowledge that U.S. and Israeli leverage in the dramatic events unfolding on the streets of Egypt is minimal — and that caution, not dramatic pronouncements, should be the order of the day.

“We are holding our breath, because the U.S. ability to steer events in Egypt today is less than nil,” said David Harris, executive director of the American Jewish Committee. “Right now, it’s all about watching, waiting, hoping and praying.”

Rep. Gary Ackerman (D-Long Island/Queens) said that with Mubarak certain not to be in the picture much longer, both Israel and the United States need to find ways to work with his likely successors.

While Malcolm Hoenlein, the executive vice chairman of the Conference of Presidents of Major Jewish Organizations, this week slammed Mohammed ElBaradei, an opposition leader widely seen as a possible successor to Mubarak, as a “stooge of Iran,” Ackerman urged restraint.

“ElBaradei says the right things in term of democratic hopes and aspirations,” Ackerman told The Jewish Week. “The concern I have is whether he is sympathetic to Iran’s ambitions. But one of these people will end up as leader of Egypt; that’s almost a given. And we have to get along with them. Why push them away? Why be seen as Mubarak’s enabler? There is no benefit now in going against the will of the Egyptian people.”

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Initially, the response from Israel to last week’s eruption of protests — and from many of its leading friends in this country — was cautious. But in the last few days, concerns about the rise of the Muslim Brotherhood and the potential role of ElBaradei, the former director general of the International Atomic Energy Agency (IAEA), in any transitional government have led to more public pronouncements.

On Monday, Prime Minister Benjamin Netanyahu edged away from his cautious approach to the unfolding crisis and warned of the potential for an Islamic takeover, drawing comparisons to the 1979 success of Islamic radicals deposing the Shah of Iran.

Israeli political analysts were more explicit: Despite Mubarak’s unpopularity at home and international criticism of his harsh authoritarian rule, Israeli security is directly connected to the survival of his regime, if not to the dictator himself, many argued.

“If Mubarak goes off into exile and the government basically continues that’s no huge problem,” said Barry Rubin, director of the Global Research in International Affairs (GLORIA) center in Israel. “But if the regime that rules Egypt falls and there is either a period of anarchy or the emergence of an ElBaradei/Muslim Brotherhood government, that is a disaster.”

Rubin, reflecting a view that Israeli news accounts suggest is common in the Netanyahu government, agreed that U.S. leverage in the fast-moving crisis is limited — but argued that in recent days the Obama administration has decided to use what clout it has to “get rid of the entire regime. This is very bad. … This is the problem here, and why not only Israel but also Arab regimes are very upset. Do you think Morocco, Jordan and Saudi Arabia, for example, have any confidence in U.S. support or protection?”

Shoshana Bryen, senior director for security policy at the Jewish Institute for National Security Affairs (JINSA), said it would be wrong to blame the Obama administration for the current crisis in Egypt and the potential fallout for Israel. But she expressed doubts about whether officials here are ready for what could come next if the Egyptian political process is opened up.

“I’m not sure how much the Egyptian people want the Muslim Brotherhood,” she said. “It is a mostly secular nation. But when you allow for democratic space in an unrestricted way, the people who fill the vacuum tend to be those who are the most organized. As in Lebanon with Hezbollah and in Gaza with Hamas, it’s the Muslim Brotherhood in Egypt.”

Any government that includes elements of the Muslim Brotherhood, she said means a “huge military problem” for a United States that remains dependent on Middle Eastern oil — and for Israeli forces that “have already started operating in a way that acknowledges the Camp David accords may not be assured.”

Like some members of Congress, she said the question of U.S. military aid to Egypt should be reviewed.

“We’re funneling money in large quantities into Egypt — and they’re spending it in ways that should make us nervous.”

Ironically, the staunchest defender of Egypt’s $1.5 billion annual allotment, a legacy of the Camp David agreements, has been the Israeli embassy in Washington. It is unclear if that protection will continue after Mubarak’s apparent ouster and with the ascendance of Egyptian political forces less friendly to the United States.

Judith Kipper, director of Middle East Programs at the Institute of World Affairs, argued that change in Egypt was inevitable in the face of Mubarak’s political repression and that many of the options for succession do not threaten U.S. or Israeli interests.

“ElBaradei is what he appears to be: a moderate Egyptian, an international civil servant, and he may play an important transitional role,” she said. “The Muslim Brotherhood has rejected violence and wants to be inside the tent, not outside; comparing them to Iran or al Qaeda is crazy and destructive.”

And while some demonstrators on the streets of Cairo have attacked Mubarak for his support for the peace with Israel, the Egyptian uprising “is about internal, domestic concerns in Egypt; it’s not about Israel.”

But others point out that the Muslim Brotherhood still opposes Egypt’s peace treaty with Israel, and its leaders have endorsed armed struggle.

The Century Foundation’s Daniel Levy said that for U.S. policymakers, the focus now should be on finding ways to revive Israeli-Palestinian peace negotiations — which he says are even more urgent in the wake of events in Egypt.

“The problem for Israel is that absent a change in its behavior on the Palestinian issue, you never will have a representative government in the Arab world that will be as indulgent of Israel as dictatorial governments have been,” he said.

The ongoing Israeli-Palestinian stalemate forces Israel to seek friends and allies only among Middle Eastern despots like Mubarak — which, in turn, just fuels rage on the Arab and Muslim street that makes compromises in the interests of peace even harder to attain, he said.

Levy said officials here will have to make their peace with the fact that “whatever leadership emerges in Egypt, the Muslim Brotherhood will be part of the tapestry if we have democratic governance. We can expect them to adhere to Egypt’s agreements with Israel, but we can’t expect them to adhere to the peace process in its current dysfunctional form.”

While Israeli leaders continue to express alarm over events in Egypt, the American Jewish Committee’s David Harris said the reaction among Jewish activists in this country is more mixed.

“It’s hard not to watch those who say they aspire to democracy with sympathy,” he said. “What remains to be seen is whether they will prevail, or whether Egypt will revert to another form of authoritarianism.”