After decades of looking to Egypt to provide stability in the Middle East, Washington finds Cairo contending with an increasingly dangerous combination of ossified leadership, Islamist violence, and disaffected minorities. From the New Year’s Eve suicide bombing at a Coptic church in Alexandria to the recent shooting of a Copt on a train in the south, Egypt is witnessing an alarming rise in violence against minorities. Depending on how much goes wrong, 2011 could be a bumpy ride.

Egypt’s disenfranchised Copts, the target of the recent bombing that killed twenty-one, are one concern. In Alexandria, the New Year’s Eve hangover brought a series of clashes between regime forces and angry Copts demanding better protection and equal rights from an indifferent government. This was not a one-off, either; in November, protests erupted after the government halted construction of a Coptic church in Giza. Copts constitute 10 percent of Egypt’s population of 80 million, and we can expect them to take to the streets in the future.

But Copts remain a low priority for President Hosni Mubarak’s regime, particularly when compared to jihadists who attack non-Muslims, regime targets and tourists as a means of weakening a government they view as too cozy with the West. The worst-case scenario is a reprise of the 1990s, when al-Gamaa al-Islamiyya went on a terror spree culminating in the 1997 Luxor attack, which killed fifty-eight foreign tourists and four Egyptians, and all but suffocated tourism for years to come.

While Egyptian intelligence has successfully squeezed the old-guard jihadists, a strange new guard may be sprouting. The hitherto-unknown Islamist group Ansar al-Sunnah al-Muhamadiya now threatens the life of former International Atomic Energy Agency chief Mohamed ElBaradei, who is pushing to change Egypt’s stagnant political system. A November fatwa charged that ElBaradei wanted “to divide us Egyptians and the prophetic words were obvious: to kill him.”

Some Egyptians think Ansar issued its decree with a nod from the Mubarak regime. After all, the government had already barred ElBaradei from running in the November elections; the fatwa was yet another warning that his reform message was unwelcome. A week later, the popular Muslim Brotherhood and secular Wafd party announced that they would boycott Egypt’s elections after a first round plagued by fraud and violence.

While Obama administration officials expressed dismay over the Egypt’s rigged polls, one WikiLeaks cable suggests Washington is more alarmed over the ossification of the Egyptian military. Egypt’s aging officers refuse to take steps to improve their military capabilities. Moreover, they still view Israel as their primary adversary, despite three decades of peace. This paranoia permeates Egyptian society. The Egyptian Bar Association blames Israel for the Coptic-church bombing, while officials alleged an Israeli plot against Egyptian tourism after shark attacks off the coast of Sinai in December. U.S. aid—slated to increase from $2.5 to $3 billion this year—has not engendered good will, but it has also failed to steel Egypt’s resolve against a nuclear Iran. Cairo has quietly expanded financial ties with Iran through the jointly owned Misr Iran Development Bank. Mubarak also warned he would seek his own nuclear weapons if Iran obtained them, prompting the U.S. ambassador to dub Egypt a “stubborn and recalcitrant ally.”

Iran, meanwhile, has reportedly established a smuggling network among the Sinai Bedouin. Cairo has tried to halt it, but Iran has the advantage. Israel’s security services reported last week that in 2010, Iran smuggled about one thousand mortar shells, hundreds of short-range rockets, and dozens of advanced antitank missiles into the Gaza Strip.

Teetering atop this mountain of challenges is the question of political transition. Mubarak, now eighty-two years old, has been president for twenty-nine years. Though he resembles a “walking sarcophagus,” as one Egyptian observer quipped, a WikiLeaks cable suggests the ailing autocrat will rule until death.

Thereafter, drama is almost a certainty. Mubarak’s forty-seven-year-old son, Gamal, wishes to accede to the throne, but Egypt’s military elite could block his succession. Depending on how much of a vacuum ensues, the Muslim Brotherhood could also make a play for the brass ring. Other contenders include Egyptian intelligence chief Omar Suleiman, and Secretary-General of the Arab League Amr Moussa.

Some or even all of this mess could play out in 2011. At best, Washington will need to recalibrate the Egyptian alliance. At worst, it’ll take an overhaul.