According to Israeli news sources on Sunday, two Iranian warships they have been closely monitoring are now in transit in the Suez Canal, or possibly already through. Israeli Prime Minister Benyamin Netanyahu said at the start of the weekly Israeli cabinet meeting Sunday that he views this “with utmost gravity”. Netanyahu also said: “I think that today we can see what an unstable region we live in, a region in which Iran tries to exploit the situation that has been created in order to expand its influence by passing warships through the Suez Canal.” He added that this was another indication that “Israel's security needs will grow.” It is not clear what will happen when the Iranian ships emerge into the Mediterranean and head, possibly, towards Syria, as Israel's Foreign Minister Avigdor Lieberman predicted last week. Lieberman called the move a “provocation.” One possibility is that international naval forces, possibly involving ships that have been added to the UNIFIL peacekeeping effort specifically to enforce UN Security Council resolution 1701 that ended the Israeli attack on Lebanon in 2006, may intercept and board to inspect the two Iranian ships — even if they do not go near Gaza's maritime space, which has been under a formally-declared Israeli naval blockade since 3-4 January 2009. The UNIFIL naval component has a mission “to assist the Lebanese government in preventing any unauthorized transfer of weapons into Lebanon via the sea, at its request.” It is unclear, however, if the current Lebanese government would now formulate such a request. Another possibility [see below] is that international forces may intercept and inspect the two Iranian warships under provisions of UN Security Council resolutions that impose sanctions against Iran due to lack of confidence in its nuclear program. The Israeli newspaper Haaretz's editor-at-large Aluf Benn wrote Sunday that “Egypt is signaling that it is no longer committed to its strategic alliance with Israel against Iran, and that Cairo is now willing to do business with Tehran … Since the uprising against Mubarak, the cold peace between Egypt and Israel has cooled even further. The delivery of natural gas to Israel, which was cut off after a terrorist attack on a station in northern Sinai, has still not been resumed”. This report is published here. Various media reports suggest that Egypt has been diverting this gas supply to its own domestic uses, pending repairs on the damaged parts of the pipeline going to both Israel and Jordan. The net effect of this disruption has, however, been a great increase of cost to both countries who are maintaining their electricity generation by using alternative fuels obtained through more expensive arrangements. Another report on Sunday in Haaretz on Sunday, with material incorporated from Reuters, indicated here that Iranian state media confirmed the transit of the two warships, although Egyptian officials working in the Suez Canal Authority gave different information. This Haaretz report stated that ” ‘Two Iranian warships have passed through the canal and are heading towards a Syrian port', Al Alam said … The report by Iran's state broadcaster Al Alam came after a Suez Canal official claimed that the Iranian vessels were to sail through the the Mediterranean on Monday, in what will be the first passage of Iranian naval ships through the canal since 1979. Suez Canal officials denied the Iranian report later Sunday, insisting that the voyage would take place, as planned, on Monday. The official said the vessels were to arrive at the southern mouth of the canal in the Red Sea's Gulf of Suez on Sunday. They were then planned to enter the canal in the northern convoy on Monday morning and complete the journey to the Mediterranean by evening. An Egyptian army source said on Friday that the military, which has been running Egypt since President Hosni Mubarak was toppled from power on Feb. 11, had approved Iran's request to send the ships through the canal”. The circumstances in which Egypt could bar transit through the Suez Canal are limited, however. Basically, Egypt could ban passage of ships flagged by a country with which Egypt might be in a state of war, or if the ships were carrying anything on board that is classified as toxic or hazardous. The Haaretz report added that “The vessels, which are apparently not carrying any unconventional cargo, are expected to anchor in the Syrian port of Latakia. Israel believes the Egyptians had no choice but to allow the ships to pass through the Suez Canal, because the treaty to which it is a signatory obliges it to allow free passage through the waterway. However, during recently ousted President Hosni Mubarak's regime, the Iranians did not make such a move, apparently due to clear opposition from Cairo. The Israel Navy is prepared in case the Iranian ships make a move toward the Israeli coastline, though the chances of that happening are at this point believed to be slim”. The freewheeling Israeli website, DebkaFile, reported, in a somewhat different tone, that “Tehran connived to slip the two Iranian warships through the Suez Canal to the Mediterranean Sunday, Feb. 20, after a series of fake delaying tactics agreed between them to cover the flotilla's movements. Egypt's military rulers approved the passage of Iranian flotilla through the Suez Canal without inspecting their freights for banned cargo, taking advantage of the sandstorm over the region which obscured them from spy satellites and helped them to give monitors the slip. Tehran marked this landmark event with an official state TV statement Sunday that the ships had entered the Mediterranean and were on their way to Syria. Sunday, Cairo was still saying they will only reach Suez Monday”. This DebkaFile reports notes that “Cairo's approval for Iranian warships transit of the Suez Canal has brought Israel and Iran closer than ever before to a naval collision at sea”, and added that “Israel has learned that the Iranian cruiser Kharg is carrying long-range missiles for Hizballah which it plans to unload at a Syrian port or Beirut harbor”. The report added that “US State Department spokesman P.J Crowley said [last week] he was ‘highly skeptical' of the Syrian claim that the two ships' visit was for training … [Crowley was] indicating that the US and all other UN members were authorized by UN sanctions against Iran to board and search Iranian ships suspected of carrying illegal weapons”… The DebkaFile report added that “Heavy US and Israeli pressure failed to dissuade Egypt's military rulers from letting the Iranian flotilla through Suez. So now the waterway has been opened wide for Iran to consign heavy weapons deliveries to Syria and Lebanon – in the first instance, and eventually to try and break Israel's naval blockade on the Gaza Strip and bring Hamas the heavy munitions that were impossible to transport through smuggling tunnels”… Financial analysts reported last week that tensions about the possible passage of the two Iranian warships through the Suez Canal had caused world oil prices to rise, and had also affected stock market trading. BM