Egypt is not preparing to withdraw its ambassador to Israel, an Egyptian diplomat said on Tuesday, playing down an earlier threat to bring home the envoy in protest at the killing of five Egyptian security personnel near the Israeli border.
The deaths, which Egypt blamed on Israel, sparked the deepest crisis in their relations since the overthrow of President Hosni Mubarak in February and four days of angry protests near the Israeli embassy in Cairo.
Egypt's cabinet posted an online statement on Saturday — which it then withdrew — saying the killing of the Egyptians was a breach of Egypt's 1979 peace treaty with Israel and it would withdraw its envoy in protest.
Low-key talks followed, with expressions of regret from Israel over the Egyptian deaths and meetings with top U.S. and United Nations diplomats.
By Tuesday, Egypt's threat appeared to have been dropped.
"There are currently no procedures being taken to withdraw the Egyptian ambassador in Israel," the Egyptian diplomat told Reuters, asking not to be named. He declined to comment further.
An Egyptian cabinet official said, on condition of anonymity, that recalling the ambassador would depend on the Jewish state's cooperation in a joint investigation of the deaths that Egypt has demanded, and when it would start.
The killings followed an attack near Israel's Red Sea resort of Eilat on Thursday by armed militants that left eight Israelis dead. Israel said the gunmen were Palestinians from Gaza who went through the Egyptian Sinai before crossing into Israel.
Israel said it was looking into what happened, but its national security adviser said no joint investigation was planned -- instead, both sides would share results of their separate inquiries.
"I don't think there will be a joint investigation in the sense that both sides will sit in front of those officers (involved in the incident)," Yaakov Amidror told Israeli Army Radio.
"But we will carry out our own detailed investigation. They will carry out their own detailed investigation, and we will sit together with the results of the investigations," he added.
Egypt recalled its ambassador from Israel in 1982 after Israel invaded Lebanon and in 2000 after heavy Israeli shelling of the Gaza Strip.
Dilemma for military council
The generals ruling Egypt since Mubarak's overthrow in a popular uprising are anxious to appease a newly assertive public among whom resentment of Israel runs deep.
The spat has highlighted a dilemma for the military council, which is trying to show it respects public opinion more than Mubarak, while avoiding a major stand-off with its neighbor.
The army refused to comment on the Israeli security adviser's statement that no joint investigation was planned.
Egypt's state news agency MENA cited a report by U.N. peace keepers on the border with Israel saying that Israeli troops had crossed into Egyptian Sinai by land to pursue the gunmen and then fired at Egyptian border guards, killing five and prompting Egyptian forces to clash with them.
The report said the peace keepers examined the boundary where the clashes took place and "recorded two violations by Israeli troops: crossing the border into Egyptian territory and firing bullets at the Egyptian side of the border," MENA said.
Sinai security sweep halted
North Sinai security officers said on Tuesday they had halted a security sweep in Sinai to root out armed groups whose numbers there have grown amid the security vacuum left by the uprising against Mubarak.
"We have caught a number of suspects who have carried out armed attacks in Sinai and bombed gas pipelines, but after the border incident many escaped to Halal mountain and we suspect they planted mines to prevent security forces from tracing them," a security source said.
Israel accuses Egypt's interim rulers of losing control over the isolated desert peninsula. Egypt rejects the charges, saying Israel is blaming Egypt for its own security failings.
Amidror, who previously headed the research division of the Israeli Military Intelligence, added that "Islamic Jihad concentrations" were in Northern Sinai and that Israel was keen for Egypt to "exert its sovereignty in Sinai more effectively".
The number of troops Egypt can deploy in the Sinai is limited under the 1979 peace treaty, which followed four wars with Israel since 1948.