However, she also recognised the limits of the historic deal made by Menachem Begin, the Israeli prime minister, and Anwar Sadat, the Egyptian president.
"There is still a lot to be explored and accomplished in our relations, above all the desire of the Israeli public to witness the opening up of the great Egyptian people toward us," Livni said.
Reda, who says he considered boycotting the reception over Israel's planned appointment of Avigdor Lieberman as the next foreign minister, said that wider peace across the Middle East was predicated on a just deal for the Palestinians.
"The tragedy of the Palestinian people is a permanent source of crisis," he said as he addressed a conference at Jerusalem's Hebrew University earlier in the day.
Reda called on Israel to embrace a a proposal by the 23-member Arab League offering comprehensive peace in exchange for accepting an independent Palestinian state on all lands captured in the 1967 Middle East war.
"It should be clear that this would serve to enable the Palestinians to secure their legitimate rights and would be in Israel's interests as well," he said.
However, Reda also warned that Jewish settlement expansion in the West Bank threatened a lasting two-state solution and said that "certain regional powers" and armed groups have taken advantage of the Palestinian crisis.
The two countries' militaries meet regularly to co-ordinate defense issues, such as the long, largely unfenced shared desert border as well as the Gaza Strip's frontier with Egypt.
There are joint committees on economics and agriculture, and thousands of Egyptians have travelled to Israel for agricultural training, according to the Israeli foreign ministry.
However, Israeli tourists are advised against travel to Egypt by their government fearing that they could be attacked, while economic and cultural ties are few.
Many Egyptians with professional relations with Israel hide the fact.
Egypt is not expected to hold any events to formally marking the signing of the treaty, a fact lamented by Israel's ambassador in Cairo.
"It needs to reach people's hearts and that's what's missing," Shlomo Cohen told Israel Radio.
Cairo also benefited from the deal with billions of dollars in US aid.
James Cunningham, the US ambassador to Israel, told Wednesday's conference in Jerusalem that the US government remained committed to working towards a comprehensive peace deal between Israel and Arab nations.
"Peace between Israel and it's neighbours and the pursuit of genuine stability and security for all in this region, have since Camp David remained a central preoccupation of successive US administrations, and that will remain the case with president Obama," he said.
"The United States remains committed to the two state solution, which we see as instrumental to ending this conflict."