Tourists visit the temple of Queen Hatshepsut at Deir el-Bahari in Luxor, Egypt. (KHALED DESOUKI/AFP/Getty Images)

It was only 16 years ago, in 1997, that members of an Egyptian militant group called Gamaa Islamiya stormed the ancient Temple of Hatshepsut in Luxor, a tourism magnet, and massacred 62 tourists before killing themselves, part of their insurgent campaign against the government. This week, Egyptian President Mohamed Morsi swore in Adel Mohamed al-Khayat, a former leader of Gamaa Islamiya and now a member of its political arm, as the new governor of Luxor governorate.

Gamaa Islamiya swore off violence and denounced al-Qaeda a decade ago. But they are still listed by the U.S. State Department as a terrorist group, which cites a number of other terrorist attacks before the group's 1999 about-face and says that part of the group never renounced violence. Khayat joined Gamaa before it renounced violence and he was serving as one of its leaders, according to Reuters, when the 1997 attack took place, albeit in a different province.

The growing political influence of Islamism in Egypt, both moderate and not, is a trend larger than just Khayat or his group. It would hardly be fair to blame Morsi for Gamaa Islamiya's long-standing base of support in some rural area of Egypt. But his decision to appoint Khayat, whose group is best known for terrifying foreigners into avoiding Egyptian tourism sites, to the job of running Luxor is baffling. The region is known as a major, international tourist draw, making it not just a source of Egyptian pride but of increasingly crucial and scarce tourism revenue.

Tourism has dropped in Egypt since the January 2011 revolution, costing the country an estimated $2.5 billion at a time when it needs every penny. So many of Egypt's problems are worsened by the country's economic struggle that you might think Morsi would seize any opportunity he could to boost tourism income. Although Khayat has said he welcomes "all forms of tourism" – a subtle pledge, perhaps, that yes Westerners are still allowed in Luxor – his appointment seems unlikely to bolster tourist confidence in the region.

Morsi has been criticized for his outreach to Gamaa Islamiya, which suffered under President Hosni Mubarak's rule. Morsi, perhaps hoping to co-opt the group's support, to combat Islamist complaints that he has not yet implemented sharia law or maybe just out of sympathy, has shown Gamaa Islamiya some of his favor. He pardoned a group member jailed for plotting to assassinate Mubarak, for example, and called for the United States to release its spiritual leader, the "blind sheikh" Omar Abdel Rahman, who is prison for plotting to blow up the World Trade Center in 1993.

Gamaa Islamiya has bolstered its support in rural areas of Nile river valley by providing security and other basic services where police can't or won't. Still, many Egyptians have rejected the group, expressing fear about its agenda. In Luxor, demonstrators protested Khayat's appointment with signs reading "No to the terrorist governor." So the group is far from universally beloved in Egypt, which makes Morsi's appointment all the more puzzling.