CAIRO (Reuters) - As Egyptians contemplate an end to President Hosni Mubarak's 30-year rule, Egypt's neighbours and Western allies want and expect continuity in a nation that has been a bulwark of moderation in the stormy Middle East.
For Western powers like the United States, seeking an end to decades of Israeli-Palestinian conflict, continuity means ensuring Egypt remains a voice for diplomatic moderation and a buttress against the spread of radical Islam.
For leaders in the Middle East, a region known for opaque governance and intolerance of dissent, another term for Mubarak or victory for his hand-picked successor may be preferable as they worry any democratic opening in Egypt may force change at home.
"The states in the region look at Egypt and say, 'Well, Mubarak has delivered stability," said Hani Sabra, an analyst with the Eurasia Group in New York.
"That's the one thing they want to see: continuity".
Speculation is mounting about whether 82-year-old Mubarak, a former air force pilot whose health is in question following recent surgery, will be fit enough to run in 2011 elections.
If he steps aside, his son Gamal or another establishment candidate would be virtually assured of victory in a nation long criticized for using authoritarian tactics to quash dissent and to stifle democracy, even if a challenge from ex-U.N. nuclear boss Mohamed ElBaradei or another independent materialises.
"The political elite in Arab countries don't want to spread the values of democracy because they know very well that democracy is very risky for their interests in Egypt and the rest of the Arab world," said Emad Gad of the al-Ahram Centre for Political and Strategic Studies.
"This is because democracy means change, human rights, accountability, and transparency".
Critics say Mubarak, who took power in 1981 following Anwar Sadat's assassination by Islamist militants, has forged a system keeping his party in power and has thrown dissidents in jail by the thousands.
The emergence of ElBaradei as a possible challenger has brought some Egyptian opponents onto the street, but it's unlikely he will be able to change the election system to run.
The Muslim Brotherhood, officially banned but Egypt's biggest opposition party, is not planning on fielding a candidate and complains the system is stacked against them.
Some warn Mubarak's promised stability will come at a cost, possibly fuelling support for radical Islamist groups like those that mounted bloody attacks in the 1990s as they sought to establish an Islamic state in Egypt.
"Continuity without legal, political, and constitutional reform will lead to an even tighter grip on power ... and more social and political confrontation in the shadow of Islamisation of Egyptian society," said political analyst Nabil Abdel Fattah.
DIMINISHED INFLUENCE
Egypt, no longer the regional leader it was in the 1950s and 1960s, at times must now vie for influence with Gulf oil and gas producers like Qatar, a fraction of its size.
But Egypt's location at the nexus of the Middle East and North Africa, its size -- about one in four Arabs is an Egyptian -- and its ties with Israel and the West mean that Egypt retains both symbolic importance and political clout in the region.
"No one can do these things but Egypt," said Ambassador Rasheed Hamad al-Hamad of Kuwait, which has had close ties with Egypt since Mubarak sent thousands of troops to help defend the tiny Gulf state from Saddam Hussein in the 1991 Gulf War.
"If there is going to be change, Kuwait always looks for there to be stability as well, so there won't be change in the kind of system that exists or the current conditions".
Countries like Saudi Arabia, another U.S. ally in the Middle East, would like to see Egypt remain an influential partner on the kingdom's regional priorities, like Lebanon and the Palestinians, said Khaled al-Dakhil, an analyst in Saudi Arabia.
Saudi's ruling family would like to see a leader who is "sensitive, moderate in talking about the relationship with the West ... There are always differences between Arab states. What is more important is how you handle those differences".
Ongoing violence in Iraq poses a stark reminder of the risks that come with abrupt political change, making Egypt's stability and security the paramount concern for neighbours such as Libya.
"Libya would be interested in seeing any change taking place in Egypt peacefully," said Mustafa Fetouri, a Tripoli-based political analyst and professor.
'TACTICAL ASSET'
Another question is how a new Egyptian leader would handle Egypt's complicated relationship with Israel.
Since Egypt's 1979 peace treaty with the Jewish state, Egypt has mediated between Palestinians and Israelis, but Egypt often condemns Israeli treatment of Palestinians as it fends off attacks from an Arab public that accuses Cairo of siding with Israelis to blockade Gaza.
Edward Djerejian, who served as U.S. ambassador to Syria and Israel, said Israel sees Mubarak "as a tactical asset" after three decades of dealings. "It's better to be dealing with the devil you know than the devil you don't know," he said.
One senior Israeli official, who asked not to be named, said: "There is a great appreciation in Israel for President Mubarak and the policies he has articulated and pursued to promote the peace process and regional stability".
Egypt was for decades the No. 2 recipient of American aid, a sign of Egypt's key role in U.S. efforts to improve Arab ties with Israel and stem the tide of Islamic militancy.
After the Bush administration angered Egypt by pressing for democratic reform, President Barack Obama appears keen to keep ties with Egypt on an even keel as it grapples with more urgent challenges in Iraq and Afghanistan. (For factbox on American aid, click)
"Having said that, people in Washington worry about the long-term political stability of a regime that doesn't open up ... so that one day there can be a peaceful exchange of power," Djerejian said.
