Occupied Jerusalem: Israel objected on Tuesday to a move by Egypt’s new leaders to deploy tanks in a volatile border area, calling the action a violation of the landmark 1979 peace accord between the two nations.

The spat is the biggest test yet of the peace agreement - a cornerstone of regional stability - since Egypt’s Islamist president took power in June, and plays into Israeli fears that the treaty could be threatened down the road.

Egypt has been building up its military presence in the lawless Sinai desert since Islamist militants there attacked an army post on August 5 and killed 16 soldiers.

Israel, itself a frequent target of Islamist extremists based in Sinai, has welcomed the crackdown. But officials say significant military moves by Egypt must be coordinated, giving Israel a veto of sorts over Egyptian security strategy.

Under the peace accord, Egypt is allowed to have only lightly armed policemen in the zone along the border with Israel. Limited numbers of tanks are permitted only in a zone on the far western side of the peninsula, within 50 kilometres of the Suez Canal.

Israel agreed last year to exceptions to the treaty, allowing Egypt’s military to deploy troops with heavier weaponry into the most sensitive zone of eastern Sinai close to the Israeli border. Israel made similar exceptions during its withdrawal from the Gaza Strip in 2005.

Egyptian troops moved into the eastern Sinai after the August 5 attack, backed by armoured personnel carriers and attack helicopters, in coordination with the Israelis.

But Israeli officials said Tuesday that Egypt’s deployment in recent days of heavier US-made M60 tanks went further than agreed and violated the accord.

While the tanks are not aimed at Israel and it does not consider them to be a strategic threat, Israeli officials said they were concerned about the precedent and that the move should have been coordinated.

The officials said they have relayed their objections to the Egyptians directly and through American mediators. The Maariv daily reported that Prime Minister Benjamin Netanyahu has demanded the tanks be withdrawn, though officials could not confirm the report. Netanyahu’s office declined comment.

US State Department spokeswoman Victoria Nuland backed Egypt’s counterterrorism efforts in the Sinai, but said any deployments of military assets should respect treaty obligations and be coordinated with Israel.

“As the Egyptians work hard now to defeat terror and turn back other security threats in the Sinai, we’ve been supportive of those efforts,” she told reporters in Washington. “We have encouraged them in those efforts, not only to enhance security in Egypt, but also to enhance security for neighbours, security in the region.”

“But as has been long-standing practice, there needs to be transparency,” Nuland added, urging that “lines of communication stay open” between Egypt and Israel.

An Egyptian border official confirmed that his Israeli counterparts had voiced concerns in recent days. “We sat together. They said, ‘We are worried about the military presence in Sinai,’” the official said.

The 1979 peace accord is a key component of Israeli security policy. It has allowed Israel to turn its focus away from Egypt, the Arab world’s largest and most powerful army, and devote resources to fronts with Lebanon, Syria and the Palestinian territories. In return, Egypt received the Sinai, which Israel had captured in the 1967 Mideast war. It was Israel’s first peace accord with an Arab state.

Israeli officials have grown increasingly jittery about the future of the accord since the downfall last year of longtime Egyptian President Hosni Mubarak in a popular revolution. Mubarak and his security men steadfastly honoured the deal during his three-decade reign.

Mubarak’s successor, Mohammad Mursi, 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, Mursi recently sacked Egypt’s military chief and longtime defence 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 50 kilometres from the Israeli border. The exact number of tanks was not immediately known.

The peace accord permitted “no more than one division (mechanised or infantry) of Egyptian armed forces” within 50 kilometres 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 US, Israel and the international community at large.

“If it is true, then Israel should go to the UN 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, Mursi faces a faltering economy, widespread unemployment and shaky ties with the still-powerful Egyptian military.

Ending this key security relationship would antagonise the military, raise tensions with Israel and the United States, and could cost Egypt billions of dollars in US 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, fuelled 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.