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Egypt has also been key in maintaining a blockade on Gaza which was imposed in June 2006 after militants there kidnapped an Israeli soldier, then tightened a year later when Hamas seized power in the tiny coastal strip.
But the official said Cairo could do a lot more, particularly to stop the smugglers who have dug hundreds of tunnels under the border between Egypt and Gaza.
"Egypt has lost control of what is happening," he said, accusing Cairo of lacking motivation to do anything about it.
"Soldiers are standing fewer than 20 metres (yards) from the tunnels and nobody is doing anything about this.
"Egypt could stop this in less than 24 hours but there is not enough motivation."
However, the official also praised Egypt for its work in apprehending Islamic militants believed to be operating in the Sinai Peninsula.
Egypt said on Friday it had arrested at least 20 Islamists suspected of extremist ideology in the Sinai, a day after Israel warned its citizens of a possible kidnap plot there.
"When Egypt got concrete intelligence about the Sinai attack they acted in an effective way," the Israeli official said.
Earlier this week, Israel said it had "updated and credible" information that members of the Army of Islam, a group that espouses an Al-Qaeda-like ideology, were in Sinai and planning to snatch Israeli tourists.
The warning was linked to Israel's assassination on November 3 of Mohammed al-Nemnem, the radical group's number two in Gaza.
The Israeli military confirmed it was behind the deadly attack on his car in Gaza City in a joint operation with the Shin Bet internal security service, describing him as a "ticking bomb" who was planning a major attack on Israeli civilians.
Israeli intelligence, the official said, had located two Army of Islam militants who entered the Sinai with weapons with the aim of planning an attack.
"Now Egypt started this wave of arrests but we don't know if these two guys have been arrested," he said.
He also blamed Hamas for being behind two rockets from Sinai which targeted the Israeli resort of Eilat and the neighbouring resort of Aqaba in Jordan, which killed one person and put huge pressure on Egypt to secure the peninsula.
"The people responsible for the attacks against Eilat and Aqaba in April and July were Hamas activists," he said.
"Egypt delivered a tough message to Hamas but they didn't do more than this. I would expect Egypt to do more than delivering tough messages."
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But the official said Cairo could do a lot more, particularly to stop the smugglers who have dug hundreds of tunnels under the border between Egypt and Gaza.
"Egypt has lost control of what is happening," he said, accusing Cairo of lacking motivation to do anything about it.
"Soldiers are standing fewer than 20 metres (yards) from the tunnels and nobody is doing anything about this.
"Egypt could stop this in less than 24 hours but there is not enough motivation."
However, the official also praised Egypt for its work in apprehending Islamic militants believed to be operating in the Sinai Peninsula.
Egypt said on Friday it had arrested at least 20 Islamists suspected of extremist ideology in the Sinai, a day after Israel warned its citizens of a possible kidnap plot there.
"When Egypt got concrete intelligence about the Sinai attack they acted in an effective way," the Israeli official said.
Earlier this week, Israel said it had "updated and credible" information that members of the Army of Islam, a group that espouses an Al-Qaeda-like ideology, were in Sinai and planning to snatch Israeli tourists.
The warning was linked to Israel's assassination on November 3 of Mohammed al-Nemnem, the radical group's number two in Gaza.
The Israeli military confirmed it was behind the deadly attack on his car in Gaza City in a joint operation with the Shin Bet internal security service, describing him as a "ticking bomb" who was planning a major attack on Israeli civilians.
Israeli intelligence, the official said, had located two Army of Islam militants who entered the Sinai with weapons with the aim of planning an attack.
"Now Egypt started this wave of arrests but we don't know if these two guys have been arrested," he said.
He also blamed Hamas for being behind two rockets from Sinai which targeted the Israeli resort of Eilat and the neighbouring resort of Aqaba in Jordan, which killed one person and put huge pressure on Egypt to secure the peninsula.
"The people responsible for the attacks against Eilat and Aqaba in April and July were Hamas activists," he said.
"Egypt delivered a tough message to Hamas but they didn't do more than this. I would expect Egypt to do more than delivering tough messages."
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