"We are surrounded," a senior security official said Tuesday, describing the aftermath of Monday's deadly attack on the Sinai beach resort of Dahab. For months now, security officials have warned that al-Qaida and Global Jihad were slowly closing in on Israel and were attempting to establish cells in the Palestinian territories. Even though this most recent attack was not in Israel, it was still cause for concern at the Kirya military headquarters in Tel Aviv, where senior officers on Tuesday referred to it as another sign of Global Jihad's encroachment on Israel. In December, an al-Qaida cell in Lebanon fired Katyusha rockets at Kiryat Shmona, and in August Global Jihad-affiliated cells in Jordan fired Katyushas at Eilat. But Monday's bombings did not come as a surprise to the defense establishment, which months ago issued an advisory against traveling to Egypt and particularly Sinai. Military Intelligence believes Sinai has turned into an al-Qaida hotbed whose cells were behind all of the latest Sinai terror attacks, including the bombings in Sharm e-Sheikh last July and in Taba in 2004, which together killed over 100 people. Although Egypt has sent special forces into the Sinai hills of Jabal Halal to weed out the terror cells, Monday's attack, security officials said, proved that their efforts were not as effective as they may have thought. Evaluations note that the cells operating in the Sinai are composed of local Egyptian Beduin who are easily recruited into al-Qaida due to their disdain of President Hosni Mubarak's regime. It is also thought that the explosives used by the cells are no longer coming from old mines and tank shells left behind by Egyptian-Israeli wars, but are being smuggled into the Sinai from Egypt's neighbors, possibly even Saudi Arabia. Even as officials are concerned with the events inside Egypt, their real concern is whether the terror there would spill over into Israel. Demonstrating the delicate situation along the fenceless Egyptian-Israeli border, three Sudanese refugees on Tuesday were caught south of Nitzana trying to infiltrate into the country. While these infiltration attempts are thwarted almost daily, most of Israel's border with Egypt is wide open, as the government recently decided not to invest the funds necessary to close off the border with a security fence, as exists with Jordan and Lebanon. Instead, the army was ordered to reinforce its troops along the border, and two weeks ago the Golani reconnaissance unit replaced the Givati Brigade and took up - together with the Border Police's Ramon Battalion - surveillance and security. Security services admit that they don't know how many infiltrators have gotten through undetected into Israel. Last month, a senior security official stationed along the border with Egypt told The Jerusalem Post that Israel was concerned with the possibility that the Jihad cells, which he said were stationed a mere 30 km. away, would try to kidnap IDF troops or border policemen nearby. Security coordination with Egypt, a high-ranking IDF officer said, was at an all-time high, with Israel keenly aware that the al-Qaida presence in Sinai posed a threat not only to Egyptian resort towns like Dahab, but also to the Negev and possibly even to central Israel. The Egyptians, the officer said, had improved their patrols along the border with Gaza, and while the Rafah border terminal was open to anyone, the Egyptian Border Police units, he said, were doing a better job at stopping arms smuggling from their side of the border into Gaza. The only hope, he said, was that they would have similar success in stopping al-Qaida in the Sinai.