AH: Israel is forced to keep the Sinai

.... If there were another war, even a short one, that could end with both sides controlling some of the Sinai, and that border could look like the DMZ in Korea.

I doubt that would've been sustainable. Egypt demanded it all back.

Don't they have limits on the troops they can station there as part of their existing deal with Israel?

Yes but lately these were modified or dropped to enable Egypt to combat "Sinai province" rebels.
 
The OP stated that Israel is 'forced' to keep it, not that it wants to keep against the will of Egypt. I read this as being that Egypt doesn't want it, however unlikely a scenario this is.

If Israel has it and Egypt doesn't want it then the settlements Israel did start when they held it is a good example of what Israel will do. Land is at a premium in Israel so anything that can be put to use will be, at the very least they can move military training areas out of crowded Israel proper into the Sinai. I'd guess they'd also set up some big national parks; iiuc Israel has put efforts into protecting the Sinai Leopard, holding the Sinai could allow them to set aside habit for the leopard.

Holding the sinai also gives Israel an important strategic position, they may be represented on various organizations concerned about shipping in the Red Sea etc.
 
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