Sadat quickly realizes that Egypt's acute economic…

Sadat quickly realizes that Egypt's acute economic and social problems are more pressing than the conflict with Israel, just as Nasser had toward the end of his life.

Sadat believes that by making peace with Israel Egypt can reduce its huge defense burden and obtain desperately needed American financial assistance.

He realizes, however, that before some type of arrangement with Israel can be reached, Egypt will have to regain the territory lost to Israel in the June 1967 War.

To achieve these ends, Sadat launches a diplomatic initiative aimed at exchanging territory for peace.