In the West, where Sadat was extolled as a hero and a champion of peace, the Arab rejection of the Camp David Accords is often confused with the rejection of peace. The basis for Arab rejection was opposition to Egypt's separate peace with Israel. Although Sadat insisted that the treaty provided for a comprehensive settlement of the Arab-Israeli conflict, the Arab states and the PLO saw it as a separate peace, which Sadat had vowed he would not sign. The Arabs believed that only a unified Arab stance and the threat of force would persuade Israel to negotiate a settlement of the Palestinian issue that would satisfy Palestinian demands for a homeland. Without Egypt's military power, the threat of force evaporated because no single Arab state was strong enough militarily to confront Israel alone. Thus, the Arabs felt betrayed and dismayed that the Palestinian issue, the core of the Arab-Israeli conflict, would remain an unresolved, destabilizing force in the region.

The Camp David Accords brought peace to Egypt but not prosperity. With no real improvement in the economy, Sadat became increasingly unpopular. His isolation in the Arab world was matched by his increasing remoteness from the mass of Egyptians. While Sadat's critics in the Arab world remained beyond his reach, increasingly he reacted to criticism at home by expanding censorship and jailing his opponents. In addition, Sadat subjected the Egyptians to a series of referenda on his actions and proposals that he invariably won by more than 99 percent of the vote. For example, in May 1979 the Egyptian people approved the Egyptian-Israeli peace treaty by 99.9 percent of those voting.

In May 1980, an impressive, nonpartisan body of citizens charged Sadat with superseding his own constitution. Their manifesto declared, "The style in which Egypt is governed today is not based on any specific form of government. While it is not dictatorship, Nazism, or fascism, neither is it democracy or pseudodemocracy."

In September 1981, Sadat ordered the biggest roundup of his opponents since he came to power, at least 1,500 people according to the official figure but more according to unofficial reports. The Muslim Brotherhood bore the brunt of the arrests. The supreme guide of the Brotherhood, Umar Tilmasani, and other religious militants were arrested. Sadat also withdrew his "recognition" of the Coptic pope Shenudah III, banished him to a desert monastery, and arrested several bishops and priests. Also arrested were such prominent figures as journalist Mohamed Heikal, and Wafd leader Fuad Siraj ad Din. Sadat ordered the arrest of several SLP leaders and the closing of Ash Shaab (The People) newspaper. A referendum on his purge showed nearly 99.5 percent of the electorate approved.

On October 6, [1981,] while observing a military parade commemorating the eighth anniversary of the October 1973 War, Sadat was assassinated by members of Al Jihad movement, a group of religious extremists. Sadat's assassin was Lieutenant Colonel Khalid al Islambuli. The conspirators were arrested and tried. In April 1982, two of the conspirators were shot and three hanged.

Whereas a number of Western leaders, including three former United States presidents, attended Sadat's funeral, only one member of the Arab League was represented by a head of state, Sudan. Only two, Oman and Somalia, sent representatives. In Egypt 43 million people went on with the celebration of Id al Adha, the Feast of Sacrifice, as if nothing had happened. There were no throngs in the streets, grieving and lamenting, as there were when Nasser died. In the Arab world, Sadat's death was greeted with jubilation.