Israel has accused Egypt of violating the 1979 Camp David peace accord by terminating the gas deal.
Egypt supplies 40 percent of the fuel Israel uses to meet its electricity needs. The Sinai pipeline was blown up at least 14 times in recent months. While Egypt claims it has terminated the contract due to non-payment, Israel has called it a political decision carrying serious implications.
The gas deal worth $2.5 billion was signed in 2005 and was to run 15 years.