CAIRO – Egypt registered an official complaint with Israel Friday over the deaths of five of its soldiers in fighting after an ambush targeting Israelis near the border between the two countries as tensions spiked between the two formerly staunch allies.

Adding to the strained ties, the Egyptian Cabinet says it has decided to withdraw its ambassador from Israel. The Cabinet statement issued early Saturday says the ambassador will be withdrawn until Israel investigates the shooting deaths of the Egyptian security forces.

Retaliatory violence between Israel and the Islamic militant group Hamas also escalated Friday in the aftermath of the deadliest attack against Israelis in three years. Israeli airstrikes killed at least 12 Palestinians, most of them militants, in the Gaza Strip, and six Israelis were wounded when Palestinians fired rockets into southern Israel.

Egypt’s official news agency blamed an Israeli fighter jet for shooting and killing four Egyptian soldiers and one policeman while chasing militants who killed eight Israelis in Thursday’s ambush in southern Israel.

An Israeli military officer said a suicide bomber, not Israeli soldiers, killed the Egyptian security forces. He said the attacker had fled back across the border into Egypt and detonated his explosives among the Egyptian troops. He spoke on condition of anonymity according to military regulations. Israeli media reported that some of the sniper fire directed at the Israeli motorists Thursday came from near Egyptian army posts and speculated that the Egyptian troops were killed in the cross fire.

It was not possible to reconcile the different versions.

“There was an exchange of fire between Israeli soldiers and terrorists on the Egyptian border following the deadly terror attack Thursday morning. We are investigating this matter thoroughly and will update the Egyptians,” the Israeli military said.

Thursday’s attack signaled a new danger for Israel from its border with the Sinai Peninsula, an area that has always been restive but was kept largely under control by former Egyptian leader Hosni Mubarak. The desert area has become increasingly lawless since Mubarak was ousted on Feb. 11 following a popular uprising.

The violence also threatened to further damage ties between the two countries if Egypt’s political upheaval and a resulting power vacuum in Sinai allows Gaza militants, who had been pummeled by a punishing Israeli three-week war 2½ years ago, to open a new front against Israel in the frontier area.

Relations between the two countries have been chilly since they made peace in 1979, but Israel valued Mubarak as a source of stability with shared interests in containing Iran and its radical Islamic proxies in the region.

Anger rose after Egyptian officials said Thursday’s gunbattles killed five Egyptian security personnel. An Egyptian security official said three died Thursday and two others died of wounds on Friday.

Egyptian protesters staged demonstrations after Friday prayers in front of the Israeli Embassy in Cairo, and politicians echoed the populist line.

“Israel and any other (country) must understand that the day our sons get killed without a strong and an appropriate response, is gone and will not come back,” wrote Amr Moussa, former Arab League chief and now a presidential hopeful. He tweeted his statement along with, “the blood of our martyrs which was spilled while carrying out their duties, will not be shed in vain.”

Gunmen crossed the border from Egypt on Thursday and set up an ambush along a 300-yard (meter) strip, armed with automatic weapons, grenades and suicide bomb belts, the Israeli military said.

They opened fire on a civilian bus heading toward the Red Sea resort city of Eilat, hitting a number of passengers, then riddled another passing bus and two cars with bullets and rigged a roadside bomb that detonated under an army jeep rushing to the scene. At the same time, Palestinian mortar gunners in Gaza opened fire at soldiers along the Gaza-Israel border fence.

The assailants killed eight people, six civilians and two Israeli troops responding to the incursion. Israel said it killed seven assailants.

Hamas, which controls Gaza, praised the attacks but denied any involvement. Israel holds Hamas responsible for all violence coming from the Palestinian territory and retaliated by striking the group.

“This is a response to the terror attacks executed against Israel in the last 24 hours,” the military said.

Israeli aircraft struck several targets in Gaza, killing five Palestinian militants late Thursday and five more on Friday, including a senior member of the Islamic Jihad, according to Palestinian hospital officials. Two civilians were also reported dead.

One of the rockets launched from Gaza Friday smashed through a roof of a Jewish seminary, damaging a synagogue in the port city of Ashdod and wounding six Israelis who were standing outside, Israeli emergency services said. Another hit an empty school while a third, aimed at the city of Ashkelon, was intercepted by the new Israeli anti-missile system known as Iron Dome.

A senior Israeli military officer who briefed reporters by phone said at least 15 Palestinians from Gaza took part in the assault. He also spoke on condition of anonymity according to military regulations.

Israeli Prime Minister Benjamin Netanyahu visited some of the wounded in the hospital Friday. “We killed the head of the group that sent the terrorists, but this is just an initial response,” he said. “We have a policy to extract a very heavy price from those that attack us and that policy is being implemented in the field.”

Israel said the attackers had come from Gaza and made their way into neighboring Sinai and from there into Israel. The attack was the deadliest for Israel since a Palestinian gunman killed eight people in a Jerusalem religious seminary in 2008.

Israeli aircraft hit multiple targets in Gaza, the military said. Gaza Health Ministry spokesman Adham Abu Salmia said at least four militants were killed and a dozen injured Friday.

One strike hit a motorcycle carrying senior militants from the Palestinian group Israel says is behind Thursday’s violence. Another five militants including the group’s leader were killed Thursday night.

At the United Nations, diplomats said that Lebanon blocked the Security Council during a closed meeting on Friday from condemning the terrorist attacks in southern Israel. The United States had circulated a draft press statement to the council, which requires the support of all 15 council nations.

“We think the council needs to speak out on this issue,” said the U.S. deputy ambassador, Rosemary DiCarlo. “We find it regrettable that because of one delegation we couldn’t issue that in a timely way.”

Riyad Mansour, the Palestinian U.N. observer, told reporters he wanted the council to take a more balanced approach by condemning the Israeli retaliatory strikes against Gaza that not only caused casualties but also destroyed an electrical generator plunging Gaza into darkness during the Muslim holy month of Ramadan.

“It is very unfortunate that the Security Council was unable to reach a common understanding in a balanced way to condemn the killing of all innocent civilians, including those in the Gaza Strip, and to call for the immediate cessation of the intensification of attacks against our people in Gaza,” he said.

http://www.cbsnews.com/stories/2011/08/19/501364/main20094898.shtml