The presidential elections in Egypt, scheduled for the end of this month, may be postponed following a renewed outbreak of political turmoil in Cairo in which 14 Egyptians have been killed and hundreds arrested.
Israeli security officials have warned that the growing anarchy could boil over the border.
The latest round of violence in Egypt's capital began last week as knife and shotgun-wielding thugs descended on a sit-in demonstration outside the Defence Ministry in the Abbasiya neighbourhood.
Most of the protesters were supporters of the Salafist presidential candidate, Hazem Salah Abu Ismail, who was disqualified three weeks ago from running due to his mother's dual American-Egyptian citizenship. The Salafists and other political parties accused the Supreme Council of the Armed Forces (SCAF), which currently holds power in Egypt, of organising the attack on the protesters.
In subsequent clashes, three more Egyptians, including at least one soldier, were killed, and hundreds wounded. At least 300 civilians, including at least 20 journalists, were arrested by the army and police.
The army has ordered a nightly curfew in central Cairo as tension remains high. Hopes that the convening of a new parliament and the upcoming presidential election would calm the country down seem to have evaporated.
"There is a feeling that everything is going down the drain in Egypt," said a senior Israeli security official this week. "The past 16 months have just been one constant downward spiral and now there does not seem to be anyone in charge. Sinai is now officially no-man's land and the rest of the country is not in much better shape. We thought until a few weeks ago that, somehow, the army and the Muslim Brotherhood would have some incentives to co-operate and maintain public order, but that isn't happening. Israel should start preparing for the worst outcome on its border."
Following the disqualification of the popular Salafist Sheikh Abu Ismail, and nine other presidential candidates, the frontrunners are now considered to be former Foreign Minister and Arab League Secretary General Amr Moussa and independent Islamist Abdul Moneim Abdul Fotouh, who broke with the Muslim Brotherhood last year.
The Brotherhood, which gained about 45 per cent of the seats in parliamentary elections, is fielding Mohammed Morsi, an uncharismatic figure who was selected after the preferred candidate, Khairat al-Shatir, was disqualified.
The Muslim Brotherhood's anticipated loss and the army's anger with the demonstrations has led to fears that the elections, currently scheduled for May 23, may be postponed. The election committee announced on Monday that it was suspending its preparations, but stopped short of actually postponing the opening of the polls.
Meanwhile, on Tuesday, the Egyptian media reported on a new operation by security forces against Al-Qaida-affiliated terrorists in northern Sinai but Israeli sources dismissed the reports, saying: "So far, all the operations in Sinai have been ineffectual, the Egyptians are just too afraid to take on the Bedouin."