During a regular briefing to the Israeli Knesset Foreign Affairs and Defense Committee on Tuesday, the intelligence chief of the Israel Defense Forces, Aviv Kochavi, highlighted growing security concerns with Egypt, and particularly with expanding terrorist networks in the Sinai.

"Terrorist groups in Sinai may try to create a diplomatic crisis [between Egypt and Israel] through attacks," Kochavi said, adding that the IDF has thwarted nearly a dozen attacks from the Sinai in the past year.

On Monday, U.S. Secretary of State Hillary Clinton echoed Kochavi's concerns in an interview with CNN.

There is "the potential of jihadists and terrorists taking up an operational base in Sinai," Clinton said. "We think this is a dangerous situation for both Egypt and Israel. It is also dangerous for Americans…We have Americans in the Sinai. We've had a few concerns about their safety."

Clinton, however, is confident that new Egyptian president, Mohamed Morsi, recognizes the danger and is committed to stopping it.

Kochavi is not as convinced.

"Although Sinai is chaotic, a no-man's land, it is of secondary importance to the Egyptian government," Kochavi told the legislators.

He warned that Morsi's power is limited by his need to consult with the Muslim Brotherhood leadership before making decisions.

Kochavi framed the issue with Egypt and the Sinai in the context of what he called an "age of political Islam" emerging throughout the Middle East. In Egypt, he noted, this trend is reflected in the struggle between the Muslim Brotherhood and the military council, which he says has created "two heads" to the Egyptian government.

Also of concern to Kochavi is the Egyptian government's courtship of Hamas and distancing from the more moderate Palestinian Authority in the West Bank.

"With Morsi's election, Hamas gained a portal, while a wall was put up for the PA," Kochavi said.