Salafist jihadi groups affiliated with al-Qaida set up camps in the relatively lawless region from where they can strike at both countries, The Jerusalem Post reported Thursday.
Members of the Freedom and Justice party, which is affiliated with the Muslim Brotherhood, demanded that Egyptian security forces act to regain control in Sinai.
The region has been the origin of terrorist attacks on both Egypt and Israel in the past several months, including a gunfight in September that killed an Israeli soldier, officials said.
Last week, Egyptian authorities arrested members of a group in Nasr City that is believed to be linked to al-Qaida.
Salafist jihadi groups in Gaza have targeted Israeli interests and Israel, in response last month, killed two members of one of the groups in a targeted attack.
The group, called the Mujahedin Shura Council, posted a statement on jihadi websites Wednesday saying it was seeking "reward from Allah" for Israel's killing of the men and called for Muslims to confront "the hateful Jews."
Al-Qaida leader Ayman al-Zawahiri said in a recent video Egyptians should revolt and "grab Egypt's dignity and honor from corrupt hands."