Monday's raid came amid a highly charged second round in Egypt's presidential election as the Arab world's most populous nation struggles to find its way in the messy aftermath of the February 2011 downfall of longtime dictator Hosni Mubarak, a staunch supporter of the Israeli peace pact.
The Israelis deployed only two Merkavas, in defiance of the 1979 treaty, and subsequently withdrew them after several hours once all the attackers had been accounted for.
But the unusual and worrying move underlined Israel's growing alarm that with Mubarak gone internal pressure to review a treaty that Egyptian say favors Israel, or even abrogate it altogether, is swelling.
The treaty, the first between Israel and its Arab neighbors, has been the center of Israel's foreign and security policies for three decades, and was central to U.S. strategic planning as well.
If the pact is scrapped or significantly amended, Israel's strategic outlook will be seriously affected and set back to a position where the Jewish state will have to remilitarize a border that's been quiet since the 1973 war.
Indeed, the entire security landscape in the Middle East would be dangerously altered.
On Friday, two Grad rockets were fired into southern Israel from Sinai, heightening tensions amid the political convulsions in Egypt over the final round of presidential elections.
The Israelis have been jumpy since eight of their people were killed in a terrorist attack from Sinai in August, the worst bloodshed there since 1973.
On Monday, Egypt's Muslim Brotherhood, the largest and most organized of the opposition parties that were banned or barely tolerated during Mubarak's rule, claimed its candidate, Mohammed Morsi, was victorious.
His rival, former air force commander Ahmed Shafiq, Mubarak's last prime minister and seen as the candidate of the military who're running Egypt for now and which seems determined to prevent a Brotherhood presidency.
The Muslim Brotherhood has stated it would renegotiate the U.S.-brokered 1979 treaty, which they and most of Egypt's 82 million people believe is heavily biased in Israel's favor.
But their critics say the Muslim Brotherhood's aim is to neuter the pact and even scrap it if they can even though it would jeopardize some $3 billion a year in U.S. aid and access to military hardware.
Shafiq's supporters in Mubarak's old guard claimed he had won the two-day run-off.
But in an ominous turn, the Supreme Council of the Armed Forces declared sweeping new powers Monday.
It introduced de facto martial law, giving the military control over parliament -- already dominated by Islamists -- and overturning a March 2011 declaration issued after Mubarak was ousted.
The Israelis obviously favor a win by the generals, with whom they can work or utilize the widespread corruption that kept Mubarak in power for 30 years.
But from Israel's perspective, a Muslim Brotherhood victory would signal Islamic policies and possibly even state support for militants, including al-Qaida.
The jihadists have established a foothold in Sinai, long neglected by Cairo, since Mubarak fell, and disgruntled Bedouin tribes are joining them. Sinai is steadily sliding into anarchy, as Monday's attack underlined.
But as Akiva Eldar, chief political columnist of Israel's liberal Haaretz daily observed recently: "There is one theme that unites the two finalists, as well as most other candidates who were dropped in the first round: they all strongly criticize the Israeli occupation of the West Bank and East Jerusalem and Israel's settlements policy.
"Both have declared that if Israel will not get involved in serious negotiations with the Palestinians on the two-state solution, Egypt will feel free to review the Camp David accord."
The years of calm seem to be drawing to a close as al-Qaida organizes in the Sinai wastes. Egyptian natural gas supplies to Israel were disrupted after Mubarak's fall.
The pipeline was bombed 14 times. Recently the gas was shut off altogether. Last September, Israel's embassy in Cairo was sacked.
The peace was never warm but now it's chilling fast.
As conditions in Egypt fall apart, the generals and their rivals may find it expedient to whip up anti-Israeli sentiment to distract Egyptians from the political morass into which they're sinking.
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