Egyptian authorities announced a nationwide state of emergency for three months and imposed a curfew in parts of northern Sinai close to Israel and Gaza, according to a decree published in the official gazette.
There was no immediate explanation for the decision but Egypt has imposed a state of emergency in northern Sinai in recent years to combat Islamist militants. Before the 2011 uprising that ousted President Hosni Mubarak, Egypt had long stretches of emergency rule.
Denial over Egypt Sinai given away
U.S. President Donald Trump's Middle East envoy, Jason Greenblatt, had tweeted "False!" on Friday to what he said were reports that the proposal would give part of Egypt's Sinai desert to the adjacent Palestinian enclave of Gaza, which is ruled by the Islamist Hamas group.
Rumors emerged around the still-secret U.S. plan to end the Israeli-Palestinian conflict about a confederation with neighbouring Jordan.
On Wednesday, Greenblatt denied that the plan envisages a confederation involving Jordan, Israel and the Palestinian Authority, which administers limited self-rule in the occupied West Bank.
"@KingAbdullahII & #Jordan are strong US allies. Rumors that our peace vision includes a confederation between Jordan, Israel & the PA, or that the vision contemplates making Jordan the homeland for Palestinians, are incorrect. Please don't spread rumors," Greenblatt wrote.
New peace plan to see light after Ramadan
White House senior adviser Jared Kushner, another main architect of the peace proposal, said on Tuesday it would be made public after the Muslim fasting month of Ramadan ends in June.
Kushner, who is married to Trump's daughter Ivanka and spoke at a Time magazine forum in Washington, did not say whether the plan called for a two-state solution, a goal of past U.S. peace efforts.
Palestinian leaders have called for the establishment of an independent state alongside Israel in the West Bank and Gaza Strip, with East Jerusalem as its capital.
Israeli Prime Minister Benjamin Netanyahu, who won a fifth term in an election two weeks ago, laid down a series of conditions for Palestinian statehood in a major policy speech in 2009.
But U.S.-brokered peace talks collapsed in 2014, partly over the expansion of Israeli settlements in occupied territory Palestinians seek for their state.
In a last-minute election campaign promise that angered Palestinians, Netanyahu said he planned to annex Jewish settlements in the West Bank if he was again chosen as Israel's leader.
The U.S. proposal, which has been delayed for a variety of reasons over the last 18 months, has two major components. It has a political piece that addresses core issues such as the status of Jerusalem, and an economic part that aims to help the Palestinians strengthen their economy.
Palestinian leaders have said Trump cannot be an honest broker after he broke with long-standing U.S. policy and recognised Jerusalem as Israel's capital in 2017 and moved the American embassy to the city last May.