The Israelis said their warships were ordered south to patrol off Egypt in response to intelligence reports that more terrorist attacks from Egyptian territory were imminent.
Tehran said the deployment by its 15th Fleet was intended as a mission of "peace and friendship" to "display the capabilities of the Islamic republic of Iran." It would also focus on "fighting piracy."
All these things may be true. But having Israeli and Iranian warships cruising in the same waters, which just happen to be a conduit for Iranian arms smuggled to Egypt destined for the Hamas-ruled Gaza Strip, raises the prospect, remote though it might be, of a confrontation at sea between these bitter rivals.
In 2010, the Israeli air force and navy intercepted several Iranian arms shipments destined for Iranian-backed Palestinian fighters in Gaza.
And right now, Gaza and the vast desert expanse of the Sinai Peninsula on its western flank is opening up as a new front for Islamist militants, imported al-Qaida veterans and indigenous Bedouin, to attack Israel.
Earlier this month, eight Israelis, five Egyptian army officers and at least 15 infiltrators, including Egyptians, were killed in fighting along the southern end of Israel's border with Sinai.
That bloodletting threatens to remilitarize Israel's southern front, which has been dormant, and unfortified, since the historic peace treaty between Israel and Egypt signed in March 1979.
That was the first such pact between the Jewish state and an Arab adversary and it's been the bedrock of Israel's strategic policy ever since. It gained Egypt large-scale U.S. aid, but most Egyptians never embraced the treaty.
The Feb. 11 downfall of Egyptian President Hosni Mubarak, a staunch supporter of the pact, brought with it demands the treaty be scrapped.
Suddenly Sinai, the battleground of four wars between Israel and Egypt between 1948 and 1973, was a hot zone again.
It was made more so because the caretaker Egyptian government lost control over the peninsula.
Under the treaty, Israel returned Sinai, captured in 1967, to Egypt, which agreed to demilitarize the territory. It is allowed to base only a few hundred troops there.
Following the recent clashes, Israel wants the Egyptians to retake control but is loath to allow them to deploy large numbers of troops and armor anywhere near its southern border.
The Israeli military is moving in forces there, security sources say, and tension is high.
In February, after Mubarak was ousted, Cairo allowed two Iranian naval vessels, a frigate and a supply ship, to pass through the Suez Canal into the eastern Mediterranean, where most of Israel's navy is based.
Apart from fueling fears Egypt would end a 32-year rift with the fundamentalist Islamic Republic, that deployment put Iranian ships in the Med for the first time since the shah, an Israeli ally, was overthrown.
The Iranian ships went to the port of Tartus in Syria, Tehran's key Arab ally. There were reports in July that Iran plans to establish a naval base there.
These have not been confirmed, but they have fueled concerns in Israel, which views Iran's nuclear program as an existential threat.
Israel has repeatedly threatened to launch pre-emptive strikes against Iran's nuclear infrastructure.
In the meantime, Iran has accelerated its ballistic missile program. It is believed to have some 200 Shehab-3b missiles operational. These can reach Israel.
On July 18, Amir Ali Hajizadeh, head of the Revolutionary Guards' aerospace division, claimed Iran had test-fired two missiles, with a range of 1,180 miles, into the Indian Ocean earlier this year.
In May, Iran is believed to have deployed one of its three Russian-supplied Type-877 Kilo-class diesel submarines in the Red Sea south of Israel.
The Israelis reportedly keep one of their three German-built Dolphin-class submarines, supposedly capable of firing nuclear-tipped cruise missiles, off Iran in the Arabian Sea at all times.
The Arab-Israeli conflict, the Arab Spring, the Israeli-Iranian confrontation and the battle against al-Qaida are starting to intersect. That's a potentially explosive combination.