Whom did Hashem bless?
Rashi: Yisrael.
Radak: One of these three, i.e. Egypt; they returned to be "My nation."
What is the meaning of "Baruch Ami Egypt"?
Rashi: Blessed is My nation Yisrael, whom I chose to be My nation when they were in Egypt 1 .
Radak: Refer to 17:25:1:2.
Malbim: Egypt will recognize the attribute of Yisrael, that Hashem chose them for His nation when they left Egypt. They will bless Yisrael for being Am Hashem.
Hashem made an eternal Bris with Avraham and his seed long before Galus Egypt (Bereishis Perek 17)! However, Yishmael and Esav were excluded. Perhaps when they were in Egypt, Hashem chose all of Bnei Yisrael to be His nation. (PF)
Why does it say "u'Ma'ase Yadai Ashur"?
Rashi: I showed to them (Yisrael) mighty acts that I did wonders against Ashur, and via those miracles, they will return to me, and they will be as if I made them now. They will be my inheritance Yisrael. Yonason translates like this.
Radak: They recognized that they are My handiwork, and I am Kel, and there is no other G-d.
Malbim: Ashur recognizes the attribute of Yisrael via Hashem's wonder of striking Ashur's entire camp in one night. They will bless Yisrael due to Hashem's act that appeared on them.
Why does it say "v'Nachalasi Yisrael"?
Radak: Yisrael were My inheritance from before.
Malbim: Yisrael themselves recognize their attribute that they are Nachalas Hashem due to their Nefesh, which is hewn from above 1 . They are "Mamleches Kohanim (Kohanei Hashem) v'Goy Kadosh" (Shemos 19:6). Hashem will never switch them for another nation. They are blessed by themselves.
Beis Yosef (OC 224:6-7): The Nefashos of Yisrael are hewn from under the Kisei ha'Kavod.
