If Egypt fails to restore order in the Sinai peninsula it could come to resemble the Afghan mountain hideouts which sheltered the Taliban and their Al-Qaeda allies, an Israeli military source warned on Thursday.

Briefing foreign journalists at the site of an August 5 attack, where still-unidentified attackers burst through a border crossing into Israel after killing 16 Egyptian guards in the adjacent Sinai, he said that "thousands" of militants were holed up in the remote region where local Bedouin help them.

"There are nests of terrorists there, big nests," he said in Hebrew, speaking on condition of anonymity.

"Since the revolution in Egypt, since the fall of (President Hosni) Mubarak, there has been a significant deterioration," he said.

"Sinai has turned into an area which is out of control," he said. "The Bedouins who control the area... they make money from smuggling and helping terrorists."

Global jihad groups, he added, are looking for areas where there is a vacuum of central authority.

"Like in Afghanistan and elsewhere, they look for the absence of government, that way they can survive," he said. "If the Egyptians don't take things in hand now, that's what they'll get, them and us."

The Egyptian military has massed troops in the Sinai and pledged to restore order to the remote, and often inaccessible area, since the cross-border raid in which the attackers used an Egyptian armoured vehicle to take them across the frontier before they were halted by Israeli helicopter and tank fire.

The Israeli source said that the Bedouin did not share the religious and political commitment of the militants to whom they sell their support.

"They don't have the ideology to blow themselves up," he said. "They don't care if they kill Egyptians or Jews, what they care about is how much money goes into their Swiss bank account."

"The terrorists pay a lot of money, they don't know the territory, they don't know how to reach a certain spot without guides."

"The same people who are smuggling drugs are the same guides who get the terrorists through, but instead of getting 100,000 dollars (for an assignment) they get half a million dollars."