Israelis and Palestinians are observing an uneasy truce after five days of fighting in southern Sinai but the clashes underlined how a security crisis brewing since Egyptian President Hosni Mubarak was toppled Feb. 11 could explode into a wider conflict.

Since the ouster of Mubarak, who actively supported Egypt's historic 1979 peace treaty with Israel, Israelis have watched with alarm as the Muslim Brotherhood and other Islamists have made political gains.

Egypt's Sinai Peninsula, a vast buffer zone between Israel and the Egyptian heartland since that pact and long neglected by Cairo, has become a hotbed of Islamist radicalism.

The Israelis maintain that arms smuggling to Palestinian Hamas militants who rule the Gaza Strip that abuts Sinai has massively increased.

That has destabilized the region where the Egyptians appear to have lost control of restive Bedouin tribes, numbering some 200,000. They're joining migrating jihadists who have built a network there.

Under the 1979 treaty, Egypt demilitarized Sinai. But the military-led interim regime in Cairo, like most Egyptians, objects to the treaty.

If it deploys large numbers of troops into Sinai, sovereign Egyptian territory, without Israel's approval, there will be trouble and that could seriously damage what little is left of the Mideast peace process.

But, analyst Ehud Yaari of the Washington Institute for Near East Policy said, "Pre-emptive Israeli operations across the border would certainly trigger a major crisis."

After the treaty, Israel substantially downsized its military forces because it no longer needed to protect its 170-mile Sinai border with Egypt.

With Egypt quiescent after four wars with Israel, the Jewish state's survival was no longer at stake. Its defense budget was slashed from 30 percent of gross national product to 7 percent.

The treaty with the most populous Arab nation, although it brought a cold peace, allowed Israel to make a massive diversion of resources toward social and economic objectives, producing an economic boom in the 1980s.

All that's likely to change with Israeli Prime Minister Binyamin Netanyahu activating large numbers of reservists and allocating funds for defense rather than social reforms. The demand for social reforms set off a recent unprecedented wave of protests.

Barry Rubin, director of Israel's Global Research in International Affairs Center, concluded in March that "Israel is going to have to spend hundreds of millions of dollars to rebuild its defenses along the long border with Egypt.

"Thousands of Israelis will have to spend more time in reserve duty to main the reinforced Southern Command.

"Arguing that Egypt will not provoke or go to war with Israel is based on a Western assessment of Egyptian interests," Rubin observed. "The regime might well decide to interpret those interests its own way.

"No matter how many international or Egyptian assurances are given, Israel cannot depend on what might turn out to be wishful thinking. Hoping for a best-case outcome is one thing; basing one's strategic calculations on it is quite another."

If relations with Egypt deteriorate, Israel would have to deploy at least one division, including its redoubtable Merkava 4 tanks, and possibly more, to counter a possible Egyptian threat.

The largely U.S.-equipped and U.S.-trained Egyptian military is considered to be one of the strongest in the Arab world. It has a standing army of 450,000 men and reserves of around 250,000, 12 ground divisions and around 3,400 tanks and 500 combat aircraft.

But it hasn't seen action since the 1973 war, when it caught Israelis forces that had occupied Sinai since 1967 by surprise with an assault across the Suez Canal. Three weeks later the Israelis defeated them.

Nor has Egypt embraced the so-called Revolution in Military Affairs, adapting the conduct of conflict to new technologies and doctrines. Israel, with a standing army of 176,500 and reserves of 445,000, has.

Yiftah Shapir, of the Institute for National Security Studies in Tel Aviv, says that if a shooting war broke out Israel would defeat Egypt in much the same way the Americans hammered Iraq in 2003.

"The American Army in Iraq was not any bigger than Israel's standing army," he noted. "They had only three divisions, one of which came late.

"True their air force was much bigger but it was mainly because of the advantages of RMA that they defeated an army of 21 divisions in two weeks."

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