The court Tuesday said it had no authority to discuss the lawsuit because it is a "matter of sovereignty" that can only be decided on by the country's president, Ahram Online reported.
Members of Egypt's Revolutionary Youth Union filed the lawsuit against President Mohamed Morsi, Prime Minister Hesham Qandil and Foreign Minister Mohamed Amr, demanding they cancel the 1979 peace treaty, the Egyptian website said.
The suit claimed the peace accords restrict Egypt's military presence in the Sinai and because of this militants are threatening national security.
Presidential spokesman Yasser Ali said last month there was no need to modify the peace treaty with Israel, saying Egypt has the ability to restore security to the Sinai Peninsula, the site said.
In the framework of the peace treaty, Egypt agreed the Sinai Peninsula would be a demilitarized zone. In August, Egypt deployed a large military presence in Sinai, including tanks and anti-aircraft weapons in order to crackdown on terror elements there. At the time, Egypt said it had coordinated the move with Israel.
Morsi has said he intends to respect the peace treaty.