Let's not be gloomy about Egypt's newly elected, power-orphaned president, Mohammad Mursi. The confrontation between Mursi's Islamism and the military junta may soften both.  Mursi needs to widen his outlook and the military should not be immersed with business projects on the side.

The Supreme Council of the Armed Forces, SCAF, issued an order to dissolve the parliament and control legislation while the election results were being counted. SCAF has a conflict of interest with the people it is supposed to defend.

 Will Mursi survive the military's power grab? He is sandwiched between the Muslim Brotherhood, his electoral base, and manipulative army generals.

 Mursi, the U.S. educated engineer, can lead Egypt if he partners with the socialist Nasserites and other liberal groups.  In addition to forging effective partnerships, he has to save the economy, moderate attitudes on women's status and religious freedoms, and play his cards well with Washington and Jerusalem.

After a week of waiting, Egyptians are relieved to learn who their new president is. Even those disheartened by Mursi's conservatism may be willing to give him a chance.

 Mursi has promised to form an inclusive government and to "serve all Egyptians, Muslims and [Christian] Copts." He pledged to appoint a secular prime minister and to transform the presidency into a team – an "institution" in his words. Through team work, and with local and international pressure, he may evolve and gain momentum.

 Mursi will soon have to reach a compromise with SCAF on the fate of the questionably dissolved parliament. He will also have to settle with the military council on drafting a secular constitution with some military supervision. The military is not as strong as it appears; it has rightly been portrayed by the international media as a "state within a state." 

 Beyond the formation of a coalition government, Egypt urgently needs external economic support.  For eighteen months the economy of Egypt has been in steep decline. Egypt has no major oil revenues. Foreign exchange reserves are rapidly dwindling and the national debt bulges. Egypt is eligible for a large loan from the sympathetic International Monetary Fund.

 The country needs foreign support to build modern industrial infrastructure.  In an Arab market of 360 million consumers, Egypt should seriously plan to manufacture popular consumer products. This is where American aid could help immensely.

 Tolerance in religious affairs and life style is critical to Egypt's prosperity. Tourists will not visit Egypt's historical treasures if the country is unstable or unfriendly to the West. The elections have shown that the majority of Egyptians, despite their personal piety, prefer to live under a secular regime. 

 Egypt can learn from Tunisia and Turkey how to reinterpret political Islam. In Tunisia, where an Islamic party won the presidential elections after the uprising, secular parties are active in the government. Family laws on marriage, divorce  and inheritance are liberal. In Turkey, the formation of the Justice and Development Party allowed leaders to be secular and industrious. Mursi made a step toward secularization by forming the Freedom and Justice Party.

 Egypt should take back its historic leadership position in the Arab world.

Mubarak's corrupt policies diluted Egypt's role in the Arab world; the dictator turned Egypt into a docile "client state."  Regrettably, the bulk of $1.3 million aid to Egypt is spent on weapons and army privileges.

Mursi will have to choose the delicate moment to ask Israel to come to the peace table with "realistic" terms for the future of Palestine.  If Mursi links his country's peace treaty with Israel to the Palestinian issue he may lose the lion's share of his foreign aid. However, he could turn a threat to an opportunity by pressuring Hamas to enter the peace process.  At the end of the day, peace between Cairo and Jerusalem may rupture if Palestine remains neglected.

 Egypt has had three main problems, the dictator, the military and the fundamentalist mindset. The first is gone and the other two are dueling.