[Legbreaker]

I think Libya was nuked and we can assume the Suez received a few hits also (it's just too important to leave alone!).
I'm not too familiar with Egypts populated areas, but one would think most would be concentrated along the coastline and Nile river valley and therefore be very suceptible to the Aswan damn being destroyed.

How would this effect relations with Israel? Not too sure, but with the canal glowing in the dark and Egypt possibly being in chaos, I'd imagine Israel could turn their attentions (and military) elsewhere, possibly moving up into Palestine and as we know, sending a token force over into Iran.

Israel itself probably would have been hit with a few strikes of it's own (and likely launched a few too if rumour of them having nukes is to be believed). Who launched them though? My guess is the USSR had something to do with it to support their allies in the region and possibly knock Israel out of the war in Iran.

It is my belief therefore that although both Egypt and Israel are in a sorry state, Israel is probably the better off (just). Therefore it is possible a substantial number of Egyptian refugees would be trying to cross over and seek a better life. This may cause tensions between what's left of the two governments and could potentially lead to conflict on a small scale (possibly restricted to naval action as a Sinai covered with radioactive fallout wouldn't be a nice place to try crossing).