Last week’s attack on the gas pipeline in the El- Arish area in northern Sinai was the fifth such attack in the past six months. According to reports in the Egyptian press, four armed, masked men infiltrated the gas terminal, blew it up and escaped without disclosing their identities. The explosion caused serious damage to the pipeline, even more extensive than the damage caused in the attack of the previous week.Although no organization has taken responsibility for the series of attacks, all of which had a similar modus operandi, various elements in Egypt have pointed an accusing finger at terrorist organizations based in the Gaza Strip: al-Tawhid wa al-Jihad and Jaish al-Islam.At this stage, it is not clear whether Palestinian Salafist elements in Gaza are behind the incidents, or whether it is Egyptian opposition elements. In any case, the ongoing nature of the attacks, their timing, the choice of targets, and the perpetrators’ successful escape all indicate that the planners have exploited the governmental vacuum created in Egypt following the fall of the Mubarak government and the weakness of the Egyptian security forces, which are focusing their efforts on major cities throughout the country.Additionally, it is evident that the target was chosen because of its essential role in Israel-Egypt bilateral economic relations.These events, along with the sharp increase in smuggling of advanced weapons through Sinai to the Gaza Strip, make the Sinai area a security challenge for Israel because of the likely strategic consequences of the new Egyptian regime’s looser control in the vast peninsula.Furthermore, the special gas agreements signed between Israel and the previous regime have recently come under strong criticism in Egypt. Various media channels have reported intentions of placing the former oil minister, who was in charge of maintaining the gas agreements, on trial on charges of “wasting public money” to the tune of $714 million. They have also reported a plan by the current administration to conduct a “reassessment” of the gas export agreements with Israel, with the goal of increasing the country’s revenues. In early July, the Egyptian finance minister announced his intention to raise the price of gas to Israel by some NIS 2.5 billion, and another senior Egyptian official even offered an assessment that the attacks on the gas pipeline were “expected to continue unless implementation of the [gas] agreement in its present format is not halted.”Even without the planned changes in the agreements, the immediate damage of these attacks is already being felt in Israel. As a result of the intermittent gas supply and the use of more expensive fuels such as fuel oil and diesel, National Infrastructures Minister Uzi Landau estimates that electricity prices will rise by some 20 percent, and the Israel Electric Company has stated that the cost of these changes to the economy is liable to reach some NIS 3b.-3.5b.ASIDE FROM the immediate economic damages, the series of attacks is an indication of the additional security risks that are liable to stem from the new situation in Egypt. The Sinai is likely to become a “no-man’s land” from a security point of view, where terrorist organizations will be able to maneuver more easily. Maj.-Gen. Aviv Kochavi, head of IDF Military Intelligence, recently observed that Egyptian security forces “are losing control over the Sinai region,” reflecting the concern of security officials in Israel about the reported sharp increase in terrorist attacks in the Sinai.Most of these terror attacks are a direct challenge to Egyptian control of the area. For example, in early January, Beduin armed with anti-tank missiles attacked the police station in Sheikh Zawid, near the Gaza border; four days later, the headquarters of Amn a-Dawla (Egyptian state security) in Rafah was attacked and burned down, and in May, it became known that dozens of armed Beduin had taken control of the Nuweiba port and prevented the transit of passengers and goods. There was also a report about the involvement of 400 al-Qaida activists in planning terrorist acts in Egypt and Sinai.In fact, it is evident that the shaky security situation in the Sinai has already affected Israel. A report published by the Shin Bet (Israel Security Agency) in May stated that terrorist organizations were exploiting the governmental chaos in the Sinai to smuggle large quantities of weapons into the Gaza Strip. IDF intelligence officials reported that Egypt had recently stopped building the physical barrier to prevent smuggling in the Philadelphi Corridor, in contravention of the agreement it had with Israel on this issue.In addition, it has been reported that in the past six months, Beduin smugglers have exploited the wide-open border in Rafah and the absence of Egyptian security forces in the vast expanses of the Sinai to smuggle rockets to Gaza. This has increased the number of rockets held by terrorist elements from 5,000 at the end of 2010 to some 10,000. In addition, the quantity of standard explosives smuggled into the Gaza Strip over the past half-year is three times the quantity smuggled in all of 2010.THE RECENT developments only sharpen the need for Israeli political and security officials to conduct an in-depth examination of the situation in light of a possible strategic shift in relations with Egypt. This would likely require new military and security arrangements on the southern front, quiet for over 30 years. At the same time, the accepted assessment in Israel thus far is that even if relations with Egypt are not as close as they were for most of Mubarak’s rule, the new regime in Egypt will continue to adhere to the peace treaty.Nonetheless, until the new regime stabilizes and as long as the Egyptian security apparatus is occupied primarily with the uprising aftermath in the large cities, the border area shared by Egypt, Israel and the Gaza Strip will likely continue to be a focus for increased terrorist activity against Israeli targets.Yoram Schweitzer is a senior research fellow and the director of the Terrorism and Low-Intensity Warfare Research Project at Israel’s Institute for National Security Studies (INSS). Gilad Stern is an intern in the INSS Terrorism and Low-Intensity Conflict Program. Einav Yogev is a research assistant in the program.