Egyptian officials say they have scrapped an agreement to supply Israel with natural gas.
Israel received around 40% of its gas supplies from Egypt and uses it to generate electricity.
The announcement comes after the cross-border pipeline suffered numerous sabotage attacks which cut supplies.
The Israeli Finance Minister, Yuval Steinitz, said the move was of “great concern”, and overshadowed peace agreements between the countries.
Egypt was the first Middle East country to sign a peace accord with Israel, in 1979, and the deal to supply energy has been a key part of agreements between the two states.