From Barry Rubin at PJ Media:
Partly under international pressure, it [Egypt's military] gave power to an elected president without securing a single one of its demands. So much for the tyrannical generals. Scores of top officers resigned and they are now being replaced by the choices of one man, the president.
Who is Mursi going to appoint to head the new Egyptian army? Given the lack of Islamist sympathizers at the top — there is much debate over how many there are among more junior officers — he needs to put in place opportunists. These would be men who in exchange for their rank and privileges will do his bidding. That is what’s happening now; the Islamist high command should come later.
Lacking any ideological orientation against revolutionary Islamism; without charismatic leadership; not at all united, and in a sense fat and greedy; without any foreign encouragement; and not wanting to shoot down its own people and set off a civil war, the Egyptian army is not a bulwark against the country becoming an Islamist dictatorship. If the Islamists could overcome a far more coherent and ideologically anti-Islamist military in Turkey so easily, there’s no reason to think a similar process won’t happen in Egypt, too.
What are the red lines for the army? First and foremost that nobody touch their economic empire and cut their budget. Mursi isn’t stupid enough to get into trouble on that issue.
Second, those who attack the military with guns must be dealt with harshly. Mursi is willing to crack down on those extremely radical Salafist groups — notably in the Sinai — who shoot Egyptian soldiers rather than just restricting themselves to attacks on Israel.
Third, the preservation of U.S. military aid. No worries there; it would take a lot for the Obama administration to cut off this assistance. The regime can go far toward suppressing women and Christians, making clear it is helping the forces seeking to wipe Israel off the map, subverting other Arabic-speaking countries, and setting up a dictatorship without having to worry about losing the aid.
Finally, will the Egyptian military constantly refuse to take steps that might entangle it in a war with Israel? Here is the most likely hope of restraint though Mursi isn’t eager for such a direct conflict either. The danger, however, is not so much an executive decision to go to war but a slow slide into conflict. Along the way, Egypt can be permissive toward those staging cross-border attacks on Israel; allow Egyptian volunteers in large numbers to go to the Gaza Strip to fight; and allow lots of weapons in the Gaza Strip. Small-scale border clashes or a future Israel-Hamas war could move things in that direction.
For the time being, however, as indicated by the ceasefire, Egypt’s new regime doesn’t want a conflict either. Consolidating its power within the country and creating a new order that will last for decades is a big task. All the institutions must be transformed, a constitution finalized and adopted, billions of dollars of foreign aid begged, oppositions tamed. As an indication, the radical nationalist regime in the 1950s spent three years at that task before turning toward an attempt to dominate the region.