Israel's concern at the popular unrest in Egypt is not just about the internal affairs of a near neighbour, but the strategic issue of its 30-year peace treaty with the largest Arab country, once its bitter enemy.

The prime minister, Binyamin Netanyahu, reportedly ordered his cabinet to refrain from commenting publicly on the unfolding drama, saying only that the treaty must be maintained. But as Haaretz reported today, the government is seeking to convince the US and EU to curb their criticism of Hosni Mubarak to preserve stability in the region, even as Washington and its allies signal their wish for an "orderly transition" which the incumbent almost certainly cannot ignore.

If democracy is the issue on the streets of Cairo, stability is Israel's paramount interest. Upholding the treaty and its military provisions is the key question, but that is closely linked to Egypt's internal politics and a likely future role for the Muslim Brotherhood and other opposition groups if the system opens up.

Mubarak, who commanded the Egyptian air force during the 1967 defeat by Israel, inherited the treaty when its architect, Anwar Sadat, was assassinated by jihadis in 1981.

Always viewed from Israel as a "cold peace", it nevertheless neutralised the country's largest Arab enemy after four wars between 1948 and 1973 and providing security on its long southern border, in exchange for returning the Sinai peninsula and destroying settlements.

It has survived since, despite the Israeli invasion of Lebanon in 1982, the Palestinian intifadas of 1987 and 2000 and the war in Gaza in 2008-09. Egypt played a key role in support of the PLO's Yasser Arafat and has continued to back Mahmoud Abbas's Palestinian Authority and Fatah movement in its struggle against the Islamists of Hamas, trying but failing to bring about reconciliation between the two.

Egypt's peace dividend has been generous financial and military support from the US, which still sees it as the lynchpin of its regional strategy. Israel has close but discreet links with Egyptian intelligence, overseen by Mubarak's newly-appointed vice-president, General Omar Suleiman.

Israeli analysts, strategists and former intelligence chiefs are all deeply concerned about the implications of the turmoil. The nightmare scenario would be abrogation of the peace treaty under pressure from an Egyptian public that has always been hostile to it, though the US would likely work hard to prevent that.

"The collapse of the old regime in Cairo, if it takes place, will have a massive effect, mainly negative, on Israel's position in the region," commented the Haaretz military expert Amos Harel. "In the long run, it could put the peace treaties with Egypt and Jordan in danger, the largest strategic assets after the support of the US."

In the Israeli media there are signs of a blame game beginning over the question of "who lost Egypt", with fingers pointing at the country's much-vaunted intelligence community. Meir Dagan, until recently head of the Mossad secret service, was quoted in a US document released by WikiLeaks as saying that the Cairo regime was stable. Aviv Kochavi, the new head of military intelligence, made a similar prognosis only last week. The precedent the Israelis fear is the overthrow of the shah by the Islamic revolution in Iran in 1979, an earlier political earthquake that changed the Middle East forever.