Rumors swirl over Egypt-Israel gas spat

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JERUSALEM, April 24 (UPI) -- A decision to cancel a natural gas contract with Israel may be an Egyptian move to counter lawsuits filed by an Israeli company, an official said.

Ampal-American Israel Corp. said Sunday it was informed its contract with Egyptian General Petroleum Corp. and Egyptian Gas Holding Co. was terminated.

Irit Illouz, vice president for finances at Ampal, was quoted by Israeli newspaper Haaretz as saying the Egyptian move was in response to a lawsuit.

"We're stating very cautiously that this is a legal tactic in response to our suits against the Egyptian government but I believe we'll know more in the next few days," she was quoted as saying. Haaretz offered few specifics about the lawsuits.

Israel gets some of its electricity from gas supplied through Egyptian pipelines, though officials have said Israel must find ways to become self-sufficient in energy. A major natural gas pipeline from Egypt was bombed more than a dozen times since the country's revolution last year.

Israeli officials had struck a bellicose tone last week, suggesting the decision was a blow to peace in the post-revolutionary Egyptian era. Israeli Foreign Minister Avigdor Lieberman told Israel's Army Radio, however, that the move might be more political as Egypt heads toward presidential elections.

Israel has significant deposits of natural gas in the offshore Tamar and Leviathan fields.