Egypt's Sinai Peninsula has turned into a "kind of Wild West," which terrorist organizations use to smuggle weapons with Iranian assistance and initiate attacks on Israel, Prime Minister Binyamin Netanyahu told Israel Radio on Tuesday.

The open desert border between Israel and Egypt has been relatively quiet since the 1979 peace treaty. But various Israeli officials have said that since the fall of former Egyptian president Hosni Mubarak, Cairo lost control of the desolate Sinai, exacerbating tensions.

Earlier this month, Jerusalem said a rocket that hit Eilat was fired from Sinai. Last August, cross-border infiltrators shot dead eight Israelis.

"We are acting against this reality and we are in ... continuous discussions with the Egyptian government, which is also troubled by this," said Netanyahu.

Iran denies supporting terrorist attacks on Israel from the Sinai.

Foreign Minister Avigdor Liberman said Sunday that the situation in Sinai was more worrying than what was happening in Iran, and called for a significant boost to troop numbers along the southern border.

In an apparent response Monday, Egypt's interim military ruler, Field Marshal Mohamed Hussein Tantawi, cautioned against any interference along the long desert frontier.

"Our borders, especially the northeast ones, are inflamed. We do not attack neighboring countries but will defend our territory," Egypt's state news agency MENA quoted him as saying.

"We will break the legs of anyone trying to attack us or who come near the borders."

Reuters contributed to this story.

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