Iranian President Mahmoud Ahmadinejad's surprising announcement that "Iran is willing to renew relations with Egypt" sparked a wave of public protest in Iran.  The announcement came during his visit in May to the UAE.
In 1981, Iran cut off relations with Egypt at the order of Ayatollah Ruhollah Khomeini, founder of the Islamic regime in Iran, to protest against the peace agreement between Egypt and Israel. Iran named a major thoroughfare in Tehran after Khaled Islambouli, the assassin of Egyptian president Anwar Sadat. Also, Tehran had not forgiven Egypt for being the only country to grant asylum to the Shah of Iran after he fled Iran in 1979.
The Egyptian government, for its part, has for years been saying that it is willing to renew relations with Iran if Iran changes the name of Islambouli Street. 
The announcement by Ahmadinejad, whose policy in both domestic and foreign affairs is usually ultra-conservative, sparked a debate in the Iranian media between his supporters and his opponents, especially in conservative circles. The latter accused Ahmadinejad of pursuing a hasty and obsequious policy that endangers the country.
Criticism of Ahmadinejad's announcement, particularly in newspapers affiliated with Expediency Council Chairman Hashemi Rafsanjani, comes against the backdrop of the ongoing power struggle between Ahmadinejad and Rafsanjani.
The following are excerpts from the reactions to Ahmadinejad's announcement.
Reactions Supporting Ahmadinejad's Statement
In a May 21, 2007 article, the Iranian weekly Sobh-e Sadeq, which is the mouthpiece of Iranian Supreme Leader Ali Khamenei circulated among the Revolutionary Guards, praised Ahmadinejad for formulating a foreign policy that would protect Iran from danger and isolation. The paper claimed that Ahmadinejad had correctly sensed that Egypt was losing its status as the leader of the Arab world in the eyes of America, and was being replaced by Saudi Arabia as the dominant force in the region. Ahmadinejad's announcement, the article added, would strengthen Egypt's status in the Middle East, and would thereby thwart the American plan to establish a Saudi-led Sunni front against Iran. The article said:
"By isolating Egypt from the Muslim world and from Iran, America drove a wedge between Iran and Egypt, [which are] the two major powers in the Muslim world. Ahmadinejad's... announcement that, if Egypt is willing, Iran is ready to immediately [re]establish its embassy in Cairo has raised the relations between the two countries to a new level...
"Although by the standards of America, which distinguishes between moderate and radical Islam, Egypt is at the forefront of moderate Islam - along with other pro-American countries like Jordan and Saudi Arabia - the fact is that Egypt's role in [directing] political and security developments in the region has been declining for some time now, because America transferred the leadership of the Arab world from Egypt to Saudi Arabia. The recent summit of Arab leaders in Riyadh, the Arab League's approval of the Saudi peace initiative as an 'Arab Peace Initiative' and [this initiative's] endorsement by Washington... [and] Riyadh's active diplomacy in the occupied [Palestinian] territories and its [role as] arbitrator in the Mecca Agreement between Fatah and Hamas - [have all] lit a red light for the Egyptians.
"As a result [of these developments]... Egypt is no longer the leader of the Arab world, and it is highly displeased [by the fact that] that America has replaced Cairo with Riyadh, and with the decline of its status in the Arab world.
"But Ahmadinejad's proposal is a bold step that will strengthen Egypt in spite of America's plans. Although Egypt and Iran hold different, and [even] opposing, views on many issues - such as on the developments in Lebanon, Iraq, and Palestine, and on how to deal with the Zionist regime - Iran does not support Egypt's isolation and the decline of its status [in favor of] Saudi Arabia.
"Ahmadinejad's proposal to establish diplomatic relations between Cairo and Tehran is, in effect, a clever policy aimed at preventing the emergence of a [Sunni] Arab front against Iran - a front that America wants to create... [The aspirations] of senior officials in Washington notwithstanding, Egypt - unlike Saudi Arabia - does not have the potential to lead this kind of [Sunni] Arab front, [which includes the entire] Arab world, against Iran. Saudi Arabia, however, is more willing [than Egypt] to fulfill this new role, owing to the prominence of the Wahhabi sect in that country, and in light of its history of ideological and financial support of the Taliban and of semi-religious terrorist groups in Pakistan and Iraq." 
Reactions Opposing Ahmadinejad's Statement
In a May 27, 2007 article in the Iranian daily Jomhouri-ye Eslami, which is affiliated with the religious seminaries in Qom and supports Hashemi Rafsanjani, senior Iranian Foreign Ministry official Javid Ghorban Oghli said that "Egypt's problem [with Iran] is not the street named after Islambouli or the monument erected [in his honor in Iran]. To the Egyptian government, Khaled Islambouli is a symbol of the opposition to the Camp David [agreement], and [its demand] to purge his name from the streets of Tehran is intended to convey the message that it has not backed down from its position [regarding this agreement]... Today, Egypt is the flagship of the so-called peace camp, and the bitter opponent of the resistance movements in the Middle East. Egypt's stance during the last war in Lebanon between Israel and Hizbullah confirms this..." 
Jomhouri-ye Eslami: Iran Must Not Speak Timidly and Pleadingly with the Egyptian Government
In a May 21, 2007 editorial, Jomhouri-ye Eslami harshly condemned Ahmadinejad's willingness to renew relations with Egypt. The article praised Khaled Islambouli, and harshly criticized the "Cairo regime," characterizing Egyptian President Hosni Mubarak as a "wretched creature," a "Zionist agent," and a "henchman of the Americans" who supported Israel in the recent war in Lebanon and actively supported Iraq in its war against Iran. Following are excerpts:
"The Egyptian foreign minister has announced... that [only] after Iran removes the name and the image of Khaled Islambouli [from the Tehran street] would the Egyptian government decide on [the matter of] renewing its relations [with Iran]. This arrogant attitude, which pretends that [Egypt] has no need for relations with Iran, should serve as a lesson to the senior officials of the Iranian [regime], and should show them that it must not speak timidly and pleadingly with governments that are dependent [upon the Americans], like the government in Cairo, or [must not] appear overly enthusiastic about renewing relations with a henchman [of the Americans] like Hosni Mubarak.
"These days, [many people] - from President [Ahmadinejad] and Foreign Minister [Manouchehr Mottaki] to several members of the [Iranian] Majlis - [are saying] that if we do not hasten [to renew relations with Egypt], we will miss a golden opportunity, and will live to regret it. It seems that [Ahmadinejad and Mottaki] have forgotten Iran's special status, and are unaware of the nature and operation methods of the Cairo regime.
"General Hosni Mubarak became president of Egypt on October 6, 1981, after Anwar Sadat was executed by the heroic Egyptian officer Khaled Islambouli. For 26 years now, General Mubarak has been clinging to his presidency, unwilling to relinquish it for anything in the world. [Recently,] he has even been preparing to keep [the presidency] within his family. In an important speech on October 9, 1981, [Ayatollah] Khomeini said that America chose Mubarak as Sadat's successor.
"After being named president, Mubarak himself said in the [Egyptian] parliament that he would remain loyal to Sadat's legacy, that he regards peace with 'the regime that is occupying Jerusalem' as a strategic move, and that Egypt wants to establish peace between the Arabs and the Zionists and to remain in concert with the American [policies]. Mubarak remains committed to these goals, and has so far acted as a Zionist agent and a henchman of the Americans. In the 26 years since then, he has invested much effort in bringing about [peace] agreements between the Arabs and the Zionist regime, and in implementing America's imperialistic plans in the Middle East. He has managed to stay [in power] for a quarter of a century with the support of every American administration thanks to the good services [he has rendered to the Americans]...
"Iran has some conditions of its own [for renewing its relations] with Egypt. First, the Cairo regime must condemn and renounce the shameful Camp David agreement... Second, [Egypt] must destroy all monuments in Cairo related to the corrupt Pahlavi regime and to the shah himself. Third, [the Egyptian government] must listen to the Egyptian people... instead of acting as an arbiter for the Zionists, serving the Americans, and interfering in the affairs of [other] peoples in the region, especially in Iraq.
"...Khaled Islambouli carried out his Islamic and national duty by executing the man [i.e. Sadat] who betrayed the Egyptian people and the Islamic nation...
"Therefore, if the Iranian officials are competent, they will establish relations with Egypt and even with America [only after they meet these] conditions. By begging a wretched creature like Hosni Mubarak to establish relations with Iran, and by hastening to present ourselves as eager to embrace America's henchmen, we are not only debasing ourselves, but are also trampling [our own] principles - because this [compromises our] national interests vis-à-vis Egypt. We did not act this hastily even in the days of the reformist government which [unlike the current government] did not brandish conservative slogans. How is it possible to brandish slogans about 'the necessity of annihilating Israel' while at the same time be so eager to renew relations with the Zionists' best-known emissaries in the region?
"What sort of conservatism is this, that lets [Iran] speak to the emissaries of the Zionists [i.e. to the Egyptians] from a position of weakness, and allows them to disrespect us, to the point of making demands of the [Iranian] people? Have you forgotten how Hosni Mubarak supported the Zionist regime during the 33-day war in Lebanon, and placed constraints on Hizbullah? Have you forgotten how, during the Iran-Iraq war, this same general, Hosni Mubarak, sent all the other generals to the aid of Saddam, [and placed at Saddam's] disposal all the military expertise of the Egyptian army, in order to destroy the Islamic regime [in Iran]? Have you forgotten [Ayatollah] Khomeini's warnings regarding Hosni Mubarak of Egypt, [King] Hussein of Jordan, and [King] Hassan of Morocco, about whom he said: 'These peddlers are emissaries of the Zionists and of the Americans in the region'?..." 
Tehran Times: Egypt Must Formulate an Independent Foreign Policy
In a May 21, 2007 article in the Tehran Times, which is affiliated with Iran's Foreign Ministry, columnist Hassan Hanizadeh stated that Iran would be able to renew its relations with Egypt only after the latter "formulates an independent foreign policy based on its own national interests and the interests of the Islamic world" and ends its dependence on the U.S.
The following are excerpts of the article, in the original English:
"A careful examination of the events of the past century shows that certain regional and international factors have played a more influential role in Iran-Egypt relations than the national interests of the two countries…
"…Iranian President Mahmoud Ahmadinejad announced Iran’s intention to resume relations with Egypt during his recent visit to the United Arab Emirates. But is there a similar determination in Egypt to thaw relations?
"Apparently, Egypt’s foreign policy is greatly influenced by regional and international powers. The country seems unable to formulate an independent foreign policy based on its own national interests and the interests of the Islamic world.
"Thus, Egypt regards the resolution of the Iran-U.S. dispute as a precondition for resuming relations with Iran. This is the major obstacle in the way of efforts to reestablish good relations between the two countries…
"The ball is in Egypt’s court, now and the two sides can clearly benefit from reestablishing and strengthening relations - but only if the U.S. referee, who is biased in Egypt’s favor, is expelled." 
*Y. Mansharof is a research fellow at MEMRI.
 ISNA (Iran), May 14, 2007.
 According to a recent statement by Majlis National Security and Foreign Policy Committee chairman Ala Al-Din Borujerdi, Egyptian Foreign Minister Ahmad Abu Al-Gheit wrote to his Iranian counterpart Manouchehr Mottaki that Egypt was willing to renew diplomatic relations with Iran without preconditions (Aftab, Iran, May 30, 2007). Egypt has not confirmed this report; however, on June 10, 2007, Iranian Foreign Ministry Spokesman Mohammad Ali Hosseini stated that a meeting between Mottaki and Abu Al-Gheit is planned for the near future. (ISNA, Iran, June 10, 2007).
 Sobh-e Sadeq (Iran), May 21, 2007.
 Jomhouri-ye Eslami (Iran), May 27, 2007.
 Jomhouri-ye Eslami (Iran), May 21, 2007. On the same day, the daily also published another article titled "Khomeini: America Appointed [Mubarak] as Sadat's Successor."
 Tehran Times, May 21, 2007. In a May 21, 2007 interview with Jomhouri-ye Eslami, Majlis member Ali Zadsar likewise described Egypt as a "satellite of America" and as a "quintessential example of American Islam."