An assault blamed on Islamist militants which killed 16 Egyptian troops has upped pressure on Cairo to retake control in Sinai, but Israel fears force alone will not resolve such a deep-rooted problem.
Amid widespread calls for vengeance, Egypt kicked off its first air strikes in the peninsula for decades to hunt down those behind Sunday's deadly attack by gunmen who also tried to storm southern Israel.
In a series of early-morning raids on northern Sinai, Egyptian forces said they killed 20 "terrorists" in a move which won a cautious welcome from Israel.
"The penny has dropped in Egypt," said top Israeli defence official Amos Gilad on public radio. "They are moving towards action," he said, cautioning it would only work if there was "root surgery against terror."
Sunday's bloodshed has highlighted Cairo's tenuous grip on Sinai which has seen rising levels of militant violence, with gunmen targeting Israel, Egyptian troops in the area and also an international gas pipeline.
And it has put huge pressure on Egypt's new Islamist President Mohamed Morsi who is facing growing calls to change the 1979 peace treaty with Israel, which limits the number of troops in Sinai, in order to reassert control.
"I suggest President Morsi urgently prepares to seek amendments to the security annexes of the Egypt-Israel peace treaty so that the security services and the armed forces are able to impose security in the Sinai, monitor the borders and stop terrorist infiltration," said former Arab League chief Amr Mussa.
For Israel, growing militancy in Sinai has meant rocket fire on the south and a growing number of cross-border attacks, one of which left eight Israelis dead in August 2011.
Although Israeli officials insist that security coordination with Egypt is working, they say Cairo has not taken the problem seriously.
"Last year, Israel authorised seven Egyptian battalions to enter the Sinai but the Egyptian authorities didn't use this opportunity to act," said Major General Dan Harel, former head of the Israeli military's southern command.
"There is a lack of will from the Egyptian authorities," he said.
"From Israel's point of view, keeping the peace treaty is a strategic interest," he said. "If it was not the case, Israel would have reacted deep inside the Egyptian territory."
But commentators said an influx of troops would have little effect on the ground, as the main problem was a lack of intelligence.
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"Egypt has no real reason to dispatch either aircraft or divisions to the Sinai Peninsula. The intelligence the Egyptian authorities have... is negligible, meaning the planes and tanks would be chasing the wind," defence expert Alex Fishman wrote in the top-selling Yediot Aharonot daily on Tuesday.
The Egyptians know that if they want to restore control in Sinai they first need to know exactly what is going on there, he said.
"The problem is that at present neither Israel nor Egypt know enough about who the enemy is, where he is situated, who his handler is and who is paying him."
The complexity of the challenge along its border with Egypt foreshadows a problem Israel also fears may take root in the Golan Heights following nearly 17 months of fighting in Syria.
Until now, Israel has been relied on its own intelligence, studiously avoiding anything which could cause friction with Cairo. And within several months, it will also benefit from the completion of a vast steel barrier along its 240-kilometre (150 mile) frontier with Egypt.
But if Cairo does not step up to the challenge, that could change.
"Israel is approaching the point at which it will have to deal with Sinai on its own, with everything this entails, including how it will affect the relationship with Egypt," wrote Fishman.
The weekend violence has also put the spotlight Gaza's Hamas rulers, who were badly shaken by the attack and subsequent allegations from sources in Cairo that Palestinian militants were involved.
Hamas "is in a complete state of panic," wrote Fishman, noting the speed with which the Gaza government shut down the network of cross-border smuggling tunnels -- a key lifeline for goods and fuel.
Arab affairs expert Guy Bechor said the threat from Sinai would force Israel, Egypt and Hamas to work together.
"These three are all threatened by this global Islamic terror, and now they are obligated to cooperate," he wrote on his blog, noting the damage to Israeli security, to Egyptian sovereignty, and to Hamas's control in Gaza which he said was being challenged by Al-Qaeda elements.
"Israel is beginning to have good intelligence in Sinai, but it cannot act on Egyptian soil. Egypt has the ability to reach the terror centres and eliminate them, but it has no intelligence.
"And Hamas can arrest the top members of these organisations while they are still in Gaza -- if Egypt pressures it.
"As of now, this terror attack mandates that the three cooperate, with Egypt in the middle, despite the mutual revulsion."