Egyptian president Mohamed Morsi's overthrow, and the Egyptian army's takeover of the country, does not pose any immediate danger to Israel, former chief of staff Gabi Ashkenazi said on Thursday.

"I think the Egyptian army is too busy [with domestic issues] to deal with anything that is outside of Egypt, so I don't think there's any danger at the moment," Ashkenazi said.

"Even in the year the Muslim Brotherhood was in power, they did not renege on the peace treaty [with Israel], and as far as stopping smuggling [from Sinai into the Gaza Strip] and handling Hamas, they were reasonable," he added.

Ashkenazi cautioned, however, that Israel needs to carefully observe the volatile situation in Egypt as the unfolding drama is still "far from over."

He said a possible security risk could come from Sinai, where decreased presence of the Egyptian army could present an opportunity for Islamist militants to act from the peninsula against Israel.

"This is a scenario that the IDF and the defense system are thinking about, and I'm sure are prepared for," Ashkenazi said, adding that for the time being, he sees no reason to interfere in Egypt.

The Israeli government meanwhile took a cautious approach to the developments in Egypt.

A spokesman for Prime Minister Binyamin Netanyahu declined to comment on Morsi's removal by the Egyptian army, but a Netanyahu confidant, Tzachi Hanegbi, expressed hope the appointment of Adli Mansour would lead to the restoration of largely frozen contacts with the Cairo government.

Hanegbi, a member of Netanyahu's Likud party and of the Knesset's Foreign Affairs and Defense Committee, hailed what he described as continued good ties with Egypt's armed forces.

"There had been legitimate doubts [that a 1979 peace treaty with Egypt would hold] because in the past year Morsi, in a very harsh manner, broke off all diplomatic contacts with Israel," Hanegbi told Army Radio, describing the first peace treaty between an Arab country and Israel.

"Yesterday's events strengthen the feeling that perhaps we have passed the bad period and perhaps now there will be a chance to have diplomatic ties with whoever will govern Egypt in the near future," Hanegbi told Army Radio.

Asked on Israel Radio whether Israel's leaders were pleased with the Egyptian military's move against Morsi, Giora Eiland, a retired general and former  national security adviser, said: "I think so. Of course, they cannot say so."

Palestinian Authority President Mahmoud Abbas, who holds sway in the West Bank, offered praise for the Egyptian army, saying it had preserved security, and congratulated Mansour.

For all of Israel's doubts about Morsi, he made clear soon after his election the peace accord was safe and Egypt, a major recipient of US aid, would abide by international treaties.

Israeli commentators also noted Egypt's key role in brokering a ceasefire in an eight-day Gaza war in November between Israel and the Islamist Hamas group. Hamas is an offshoot of the Muslim Brotherhood, which calls Israel a racist and expansionist state.

During Morsi's presidency, Gazans have been disappointed by Egypt's intensified crackdown on tunnels running under the border with the Sinai, a network used to smuggle arms and goods.

Niv Elis contributed to this report.

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