Mubarak's successor, Mohammed Morsi, is much cooler toward Israel. His party, the Muslim Brotherhood, has said it will abide by the peace accord but has repeatedly called for changes in the limits on troops in Sinai. It sees these constraints as humiliating.
Further unnerving Israel, Morsi recently sacked Egypt's military chief and longtime defense minister, removing key figures in what has historically been a close security relationship with Israel.
An Egyptian security official confirmed that some M60 tanks are now located in the Sinai near the port of El-Arish. He said the vehicles are there solely to protect the city, which is roughly 30 miles (50 kilometers) from the Israeli border. The exact number of tanks was not immediately known.
The peace accord permitted "no more than one division (mechanized or infantry) of Egyptian armed forces" within 30 miles (50 kilometers) of the Suez Canal. El-Arish is well beyond that radius.
Egyptian presidential spokesman Yasser Ali denied receiving any complaints from Israel. "Security in Sinai is among Egypt's national security priorities, and nothing can stand in front of this," he said.
When asked if this means Egypt can send troops regardless of Israel's approval or objections, he declined to answer.
Zvi Mazel, a former Israeli ambassador to Egypt, said he had no direct knowledge of what weapons Egypt had moved into the Sinai. If the reports are true, though, he said it could harm Egypt's standing with the U.S., Israel and the international community at large.
"If it is true, then Israel should go to the U.N. as this is a serious breach of the treaty," he said.
Talk by Egyptian leaders of amending, much less nullifying, the peace accord may be mainly rhetoric. The Muslim Brotherhood is fiercely anti-Israel, as is the Egyptian public.
But political realities will make that very difficult. At home, Morsi faces a faltering economy, widespread unemployment and shaky ties with the still-powerful Egyptian military.
Ending this key security relationship would antagonize the military, raise tensions with Israel and the United States, and could cost Egypt billions of dollars in U.S. aid it receives as a result of the peace accord.
Renegotiating the accord would also force the Brotherhood to break its vow never to meet with Israeli officials. Any deal could be spun as the Brotherhood signing a peace agreement with its nemesis, no matter how much it tries to deny that.
Perhaps most important is the realization on both sides that they face a common foe in the Sinai, where rogue groups either inspired by or loosely linked to the al-Qaida terror network are believed to operate.
Militant activity in Sinai has grown for several years, fueled in part by resentment among many native Bedouin over police heavy-handedness and lack of adequate government services.
Things rapidly worsened after Mubarak's ouster. Police largely melted away and are still too afraid to patrol many areas. A massive flow of smuggled arms from Libya, including heavy machine guns, RPGs and anti-aircraft guns, have made their way to Sinai militants.
Shadowy Sinai groups have carried out several rocket attacks on Israel, most recently last week. And in June, militants crossed from the Sinai into southern Israel and killed an Israeli civilian worker helping build a fence along the border.
Eli Shaked, another former Israeli ambassador to Cairo, said it's a joint Israeli and Egyptian interest to keep the Sinai quiet, so he didn't expect the issue to turn into a major crisis. "In the final analysis, the Egyptian military is coordinating with Israel, but I cannot say for certain when that is done or how," he said.
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