While israel is disappointed with Egyptian efforts to stop the smuggling of weapons over the border into Gaza, joint intelligence efforts between the two countries are ongoing and there have been recent successes in tracking down terrorists in the Strip and in Sinai.
Last week the Egyptians arrested 25 terror suspects living in northern Sinai, with Israel's help. They are currently searching for a cell of seven jihadists still at large in the desert.
Two weeks ago, a senior operative of the Army of Islam group, Muhammad Namnam, was killed by an explosion in a joint operation involving the IDF and Shin Bet in Gaza.
Namnam was reported to have been involved in attacks against Israel and also in plans to attack American units belonging to the Multi National Peacekeeping Force in Sinai.
According to a report in Time magazine, Egyptian intelligence supplied Israel with information that led to the "targeted assassination".
Yuval Diskin, chief of Shin Bet, Israel's internal security agency, briefed reporters on Sunday telling them that Hamas now had missiles with a range of up to 80km, smuggled in through the tunnels under the Egyptian border.
According to Mr Diskin, "Most of the tunnels that are used to smuggle these rockets and explosives and other weapons are in an area of 3-4 sq km, or up to 2.5 sq miles. We see it in our intelligence. We have photos of this. In many places we can show photos of Egyptian soldiers located less than 20 metres from the opening of a tunnel, and the tunnel is operating under his eyes, under his control, and nobody is doing anything about it. Egypt can stop all this smuggling of weapons within 24 hours if they want to do it."
Hamas and other Palestinian organisations have been stepping up their operations in Sinai in recent months as the border fence and large military presence on the Israel-Gaza border has made it very difficult to launch raids directly from Gaza.
Hamas is also concerned to avoid Israeli retaliation attacks on the Strip and therefore prefers to use Sinai as
Israel is worried that Hamas, together with Islamic Jihad groups affiliated with Al-Qaeda, could use Sinai as a launch site for missile attacks against the Eilat, or as a base for sending suicide bombers into Israel. There is also concern that Israeli tourists are at risk of being kidnapped, and the National Security Council issued a stern warning over the weekend to Israelis to keep out of Sinai.